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Hitachi Payment Services, a subsidiary of Japanese conglomerate Hitachi, is planning to tap the transit payment segment in the country, at a time when the government is promoting smart city projects and metro rails across the country. At least 60 metro projects are likely to come up over the next few years and the company foresees an investment requirement of Rs one billion for a 25-station metro project covered under complete digital payment solution.
The company, which has been predominantly into the ATM business, with a near 50 per cent market share in the country's cash recycling machine business, also expects its digital payment services business to grow faster in the near future. Currently, it has a 20 per cent market share in both the overall ATM market and in digital payment services, says Loney Antony, managing director, Hitachi Payment Services Pvt Ltd.
"Payment services for the transit sector is a huge emerging opportunity and we want to be a major player in this also," Antony said, adding that the company is among the top three players across all the segments it currently operates in. These include ATM, Point of Sales (PoS) and digitial payment for e-commerce.
It has already started implementing RFID-based digital payment option on about 20 toll roads on SBI's behalf and is likely to bid for various upcoming metro projects. At least 60 metro projects are likely to come up across the country over the next three years, which would be another opportunity the company would be focusing on.
"We may not be able to quantify the opportunity, but we expect that for each metro project with 25 stations, complete implementation of digital payment solution would require an investment of around Rs one billion. The investment will come from Hitachi Payment Solutions if it wins the tender," Antony said.
In September 2016, there were about one billion retail transactions in the country of which almost 72 per cent were in ATMs and the rest were through digital payment modes.
However, in January 2018, of the 1.65 billion retail transactions, which is a 65 per cent growth attributable to the post-demonetisation period, ATM transactions were about 50 per cent, while digital payment services took the remaining 50 per cent. The company is focusing on the digitial payment services business, which could contribute to half its revenue going forward.
The company is also a major player in the PoS business, with 70 per cent of the PoS terminals of SBI deployed and managed by it. While PoS sales have seen tremendous growth, from around 1.7 million before demonetisation to over three million now, banks are also opting for QR code system for a section of their clients.
Antony said the company is also open to acquiring new technologies in the segment.