PROJECT REPORT

POS & Cash pick-up MARKET SURVEY

SUBMITTED IN PARTIAL FULFILMENT OF MBA (FINANCE) PROGRAMME OF UNIVERSITY OF LUCKNOW

2011-13
Submitted By:Vidushi Mehrotra, MBA-Finance, Semester III, Department of Business Adminstration, University of Lucknow.

DECLARATION

I hereby declare that the project report titled POS & Cash Pick-Up, Market Survey has been undertaken as a part of the corporate strategy and new business development of State Bank of India. This work has been made successful under the able guidance of Mr Rohit Tandon, AGM (SMEBU-1), State Bank of India, Local Head Office Lucknow. The results and outcomes of the report are totally based on my understanding of the topic and based on the facts and figures emanated out of the survey of varied markets and the analysis of questionnaires collected.

Date: July 6th, 2012

Name of the student Vishva Vidushi Mehrotra

ACKNOWLEDGEMENT

It was an opportunity to conduct study, on behalf of State Bank of India and to develop an understanding of Finance as a part and parcel of this project. I would like to express my sincere gratitude and regards to Mr Rohit Tandon, Assistant General Manager, SMEBU-1, LHO Lucknow who supported me in completing this project. I am also grateful to Mrs Suman Gupta (Deputy Manager) and all the other staff members of SMEBU-1 for their guidance and support during the term of my training for the completion of this project report and for a better understanding of Corporate Strategy and business development. I would also like to thank my alma mater University of Lucknow for providing me this opportunity to put into practice, the theoretical knowledge from this programme. I extend my gratitudes towards my family and friends, who have helped me throughout the tenure and my apologies to those, whom I have inadvertently omitted.

TABLE OF CONTENTS S. No. 1. 2. 3. 4. Particulars Executive Summary Introduction Scope of the Study Literature Review POS Cash Pick-up SBI-History Research Methodology Results and Findings Limitations and Caveats Conclusion and Recommendations Exhibits Questionnaire Statistical Output List of Shops Page no 7 9 12 13 14 18 19 21 31 32 33 36 37

5. 6. 7. 8. 9. 10.

LIST OF TABLES Serial no. A1. B1. B2. B3. B4. B5. B6. B7. B8. B9. B10. Particulars Companys Snapshot Have you ever used a POS machine? Duration of POS usage Percentage of banks issuing POS Bank charges per transactions through POS Percentage of cards swapped through POS Have you ever faced any difficulty in POS usage? Percentage of sales made through cash Have you ever used cash pick-up facility? Use of cash pick-up services of different banks? Have you ever faced any difficulty in cash pick-up? Page no. 16 21 22 23 24 25 26 27 28 29 30

LIST OF GRAPHS Serial No. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Particulars Have you ever used a POS machine? Duration of POS usage Percentage of banks issuing POS Bank charges per transactions through POS Percentage of cards swapped through POS Have you ever faced any difficulty in POS usage? Percentage of sales made through cash Have you ever used cash pick-up facility? Use of cash pick-up services of different banks? Have you ever faced any difficulty in cash pick-up? Page No. 21 22 23 24 25 26 27 28 29 30

EXECUTIVE SUMMARY

Banking is a Service Industry dealing with financials needs of individuals and Industry Majors. In todays competitive scenario Customer Service is the key to the success of every service provider. As a measure of improving its Market presence and reach, and to improve its brand image and performance banks are coming up with newer products taking the leverage of the advent of Technology. In this regard banks have come up with Point of Sale terminals and cash pick up facility to take care of the day to day needs of the traders. Further, now a days as the focus of individuals have shifted towards cashless shopping and purchases most of the banks are offering credit cards, debit cards and master cards to its customers. Considering the ever increasing need of these traders the State Bank of India has also entered this market. In order to tap this Merchant Acquiring Business, POS Machines and Cash Pick-Up is made available to traders as a total solution to them. Therefore with this objective, we attempt to study the present market scenario of POS and cash pick-up services and the details of related services provided by various other banks. In this pursuant we conducted survey of major markets of Lucknow on sample basis with the help of a comprehensive questionnaire. Our findings reveal that Axis bank is the major player in these two products followed by HDFC bank. The public sector banks are lagging far behind in offering these services and needs to do a lot to promote these products in the market. Further, there still exists a lot of untapped potential in the market which may be focused upon by bank for increasing its market share. During this survey we have realized that most of the sales were made in cash and the majority of cards swapped through the terminal were those of SBI. SBI can explore this opportunity as its rates are competitive in the market and major card usage is that of SBI cards.

OTHER FINDINGS
A study by Edgar, Dunn & Company (EDC) and India Cards Council (ICC) has revealed that unlike in UK and Australia where 90 per cent cards are active, there are only 56 per cent active debit cards in India. There is a very low level of debit card usage at POS (Point of Sale) compared to other countries. For example: 26 per cent of active debit cards used at POS versus 86 per cent in the USA and 45 per cent in Australia. The very low costs associated with new cardholder acquisition may indicate that insufficient resources are being applied to checking credit worthiness of applicants. Debit cards are primarily used for ATM withdrawals, to support cash-based transactions. In the credit card segment too, India only has 56 per cent active cards against 80 per cent in Australia and 75 per cent in Singapore. Credit losses in India also are relatively high because of low level of transaction volume and value across the card base. A high level of inactive cards in the portfolio can indicate that customers are holding credit cards from multiple banks. Card base of public sector banks expanded 7.4 per cent year-on-year to 3.09 million at the end of April, while credit cards with private and foreign banks together declined 1.5 per cent year-on-year to 14.7 million. At the end of April, SBI had a card base of 2.25 million, or eight per cent more compared to a year earlier. The bank offers credit cards through SBI Cards, its venture with GE Capital. SBI Cards is currently the fourth-largest credit card issuer in the country and the largest among public sector banks. The bank aims to source one million cards annually in two years. PNB expanded its credit card base the fastest among large banks. Cards with the bank rose 27 per cent to 1,03,712 at the end of April. Some private sector banks, however, have defied trends. For instance, HDFC Bank, which accounts for the largest credit 8

card base (5.65 million), added 5,50,000 cards, expanding its base by about 11 per cent. In the past year, the bank announced a slew of initiatives, including the no-limit card 'Infinia' card, to augment its card base. Some foreign and private lenders took the inorganic route to enter into, or expand, credit cards businesses. IndusInd Bank acquired Deutsche Bank's card portfolio to enter the market, while Standard Chartered Bank bought Barclays' card business in India to expand its portfolio. However, with major players like ICICI Bank and HSBC refraining from growing their card business, the aggregate market share of private and foreign lenders in this segment failed to rise.

INTRODUCTION
POS (Point of Sale terminal) POS (Point of Sale terminal) refers to a terminal on which a Debit/Credit or Prepaid card is swiped (in a card present environment).This involves an issuer and an acquirer. Issuer refers to the Bank/Card Company, which has issued debit, credit or prepaid cards to customers. And acquirer refers to the Bank which has put up POS terminals at various merchant establishments to facilitate genuine card holders (customers) making payments to merchants by swiping cards. Prizm (i.e. M/s. Prizm Payment Services Pvt. Ltd.) is our current Technology Service Providers, who carry on services viz. installation, maintenance of POS terminals, handling transactions routed through SBI POS, sending e-statements to merchants, attending to Merchants calls though Help desk etc. Terminals are currently maintained by Prizm without any additional cost to Merchants. Merchants can lodge their complaints to Prizm on their regional help-desk numbers. Once the proposal for installation of a POS terminal is approved by the MAB and communicated to Prizm and the infrastructure at the Merchant Establishment is ready, the terminal is installed by Prizm within 10 to 15 days depending upon the location of the merchant. Type of Terminal: There are four types of terminals viz. normal PSTN, CDMA and GPRS. The details of terminals are as under: PSTN: Works over normal telephone land line thus having an advantage over GPRS and CDMA machines which are dependent 9

on signal strength. The merchant bears the communication costs and the mobility is dependent on the length of telephone wire. CDMA: Works over CDMA technology using a modem. Being independent of telephone lines it has the advantage of better mobility and the merchant also saves on the cost of communication. However, the merchant needs to pay Rs. 200/- per month (Rs.2400/- upfront for the year) towards cost of SIM in addition to the normal MDR. GPRS: The terminal works on the mobile networks and is independent of a power source, thus providing maximum mobility and no communication cost to the merchant. However, the merchant needs to pay Rs. 1000/- (Rs. 6000/- upfront for 6 months) towards the cost of SIM etc. in addition to normal MDR. Ethernet: POS terminal works on Internet protocol and can be connected with a LAN cable. Currently this type of terminal is being used for our Green Channel Counter (GCC) transactions. We need to build a private network with the merchant and hence this is not feasible for stand-alone merchants. Manual (deferred or batch) processing means the order is received with the credit card number in person, through a phone call, fax, or online form, and given to the merchant who then processes the order manually, either by using a physical point-of-sale (POS) terminal to swipe the card or keying it in using a virtual softwarebased terminal. Weve all seen the POS terminal at our local grocery store or retail outlet. These terminals work with phone lines, but can also be operated using wireless technologies. A virtual software-based terminal is installed on a PC with a modem and available through any web browser. Credit card information is added to an online form and then submitted. The information is either stored on the merchants server or on the server of a service provider, and securely protected using SSL or other security programs. There are two phases involved authorization and settlement. Authorization: Authorization is a process whereby the merchant verifies the card being presented by the customer is not a stolen card and that it has enough credit available to complete the purchase. The process 10 in manual processing

begins when the merchant receives the credit card number, which is obtained by swiping the card through the POS terminal or by keying the card number into the virtual terminal. If the card is a Visa card or MasterCard, the card data is transferred to the merchants (acquiring) bank, which channels the information to the credit card company. The credit card company requests authorization from the cardholder's (issuing) bank to ensure the card is actually owned by the cardholder. Once authorized, approval is sent from the issuing bank to the credit card company and back to the acquiring bank and merchant. The data that passes through to each player in the authorization process is encrypted using the latest SSL technology. Settlement: Settlement is the process merchants follow to ensure they receive payment for products and services sold. At the end of the day, the merchant will transmit the receipts from sales for that day and send them electronically from the card terminal in a batch. The acquiring and issuing banks then communicate with the card companies in the manner outlined above in the authorization process. CASH Pick-Up Cash Pick ups are the in bound part of the Cash logistics operations. The service includes picking-up of cash from the customer premises, depositing the same in the bank, reconciliation and reporting. In addition to all the advantages available with the Cash delivery model, cash pick up services provide following additional advantages: Quick receipt of receivables for network operators thereby helping in managing cash flows and reducing dead cash at other offices Consolidated cash receipt at Bank branches instead of individual pick ups thereby increasing productivity of Bank cash staff Disposal of low quality cash in other channels thereby improving cash balance quality and utilization However, at the end of the day all cash is collated and processed together and Bank gets a single statement showing client wise receipts and other details. To ensure full security of these 11

operations, in addition to the security measures listed in delivery section, special processes are followed to ensure that the information does not leak out hereby exposing the client. To ensure that the client is absolutely comfortable in handing over the cash, elaborate arrangements for employee identification, pick up authentication and audit trail are made.

SCOPE OF THE STUDY

Merchant Acquiring Business (MAB Background) MAB is primarily referred to as the mechanism of facilitating payment for goods and services purchased through medium of a card. The Merchant Acquiring Business emphasizes on the use of cards in a typical retail purchase transaction. The transaction involves card holders and their Banks (Issuer) on the one side, Merchants and their Banks on the other (Acquirer) and a payment network (Visa/ MasterCard) in the middle that co-ordinates the flow of information and money underlying the transaction. The merchant services industry is shaped by the relationships between merchants and acquirers. The Merchant Acquirer is defined as the member financial institution responsible for its merchantcustomers transaction and for maintaining relationship with the payment network. 12

The scope for Merchant Acquiring Business has substantially increased due to a thrust on electronic receipts and payments by government, hospitals, railways, airlines, educational institutions etc. It promotes a cashless payment environment which is beneficial to all stakeholders. To carry on this task, the Bank has formed a Wholly Owned Subsidiary (WOS) in the name of SBI Payment Services (P) Ltd. (SBIPSPL). SBIPSPL was incorporated on the 12th February, 2010. Till it starts its operations, the Bank has started doing this business by deploying POS terminals, on request received from Circles.

LITERATURE REVIEW
The Merchant Acquiring Business comes with various advantages for the stake holders: For the card holders: No need to carry cash, which is risky. Customers can maintain higher balances in the account, resulting in higher interest income on deposits. Saves time and also money for transportation in visiting bank Branches / ATMs to withdraw money and then to spend the same at merchant outlets, who again have to deposit the same in Banks. The time saved results in lower cost and higher productivity as time saved can be gainfully utilized. Can avail promotional benefits on offers. 13

For the Merchant: Cash handling is avoided, pure cashiers can be dispensed with in large stores. The risk of forged notes is eliminated. The customers have tendency to go in for higher purchases while using the card as there is no restriction on account of limited carrying notes in the purses. The customer stickiness to merchant increases due to the facility. For the Bank: The transaction costs at Branches or ATMs is avoided when cards are swiped at POS machines. Increase in CASA deposits due to non withdrawal in bulk from ATMs prior to shopping. The flight of business to other banks due to not offering the facility is arrested. The card base is leveraged to facilitate customer convenience and thus facilitate stickiness. CASA improves also because of the settlement account of the shopkeeper getting funded.

POS Applications As competition between merchants intensifies, so does the evolution of payment options to attract new customers and retain existing ones. The changing e-payment landscape has created a need for a versatile, multi-purpose device that can support the full spectrum of applications needed by the competitive retail environment. What was initially a single purpose device, the POS terminal is becoming a more sophisticated tool that supports smart cards, loyalty programs, advertising and the operation of company legacy systems. P.O.S Card Systems has the resources to provide electronic merchant services to every industry ie. Retail, Restaurant, 14

Hospitality, Mail/Telephone Order, Business to Business and Mobile merchants.

e-commerce,

CASH PICK-Up
I. The cash pickup agency would get in touch with the local business offices and decide on a mutually comfortable time for cash pickup. II. Customers authorised representative should fill in the deposit slip details, sign it (by an authorised person), and keep the deposit slips ready by the time of arrival of officials of the cash pickup agency. Customer shall keep the entire cash denomination-wise duly counted in packets of 100, III. Packed with note slips along with duly filled up deposit slips. The deposit slips to be used will be the special deposit slips provided by SBI Bank for this purpose and the number of notes and the total amount in such packets shall be mentioned on the deposit slips. IV. Customer shall separately pack loose currency with the note slips, stamp, signature and date. The number of notes in such packets shall be mentioned on the note slips. V. Customer should use the special deposit slips (Quadruplicate) as provided by SBI Bank for deposit of cash through the cash pick-up services of SBI Bank. All the four copies of the deposit slip/challan will be signed by customer and the agency's authorised person. The agency will provide the first copy against receipt of cash and handover the other three copies of the deposit challan to the bank along with cash. The bank retains the 2nd copy and acknowledges receipt of cash on the 3rd and 4th copies of the deposit challan. The agency retains the 4th copy for its records and sends the third bank acknowledged copy by local courier the next working day to customer or handover the same to customer in three working days. It is customers responsibility to collect the bank acknowledged copy of the cash deposit challan (3rd copy) from the cash agency VI. The cash pickup agency will provide a Hidden Code Identification Slip ( 3 ply ) booklet (Client's Copy) to customer on a monthly basis and a hidden random number, which can be

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seen only after opening the 2nd and 3rd ply of the slips . The cash pickup agency would maintain a duplicate of the same booklet (Agency's Copy) with corresponding serial number. VII. At the time of pickup execution, the cash pickup agency, on reaching customers office, shall carry a leaf from the HCI Slip booklet held by them at their office, containing the same serial number as that available with customer in their booklet (Agency's Copy). Customer shall also take out the same serial numbered leaf from the booklet available with them (Client's Copy). If the hidden number in the HCI slip matches (after scratching both the leaves) then, cash is handed over to the cash pickup agency & the HCI slip exchanged. VIII. Customer should also check the ID card of the person collecting the cash. This ID card should be from among the details provided to customer at the beginning of the services. IX. The scratch card will be replenished directly by the cash pickup agency. The same shall be given along with a letter from the cash pickup agency, from an authorized signatory, in a sealed envelope. X. When cash pickup agency reaches customers office, the client should get the loose notes counted by the cash pick up agency in their presence. On being satisfied with the total count of loose notes and sealed packets, cash pickup agency will sign and stamp the deposit slips (duly filled in by the client, and give the first copy of the same to the local client office as an acknowledgement, subject to return based on shortages, soiled, counterfeit or torn notes found subsequently by SBI Bank.

COMPANYS SNAPSHOT

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State Bank of India

Type Traded as

Public NSE: SBIN BSE: 500112 LSE: SBID BSE SENSEX Constituent Banking, Financial services 1 July 1955

Industry Founded

Headquarte Mumbai, Maharashtra, India rs Area served Worldwide Key people Pratip Chaudhuri (Chairman) Credit cards, Consumer banking, corporate

Products

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banking,finance and insurance,investment banking, mortgage loans, private banking, wealth management Revenue Profit US$32.44 billion (2011) US$2.34 billion (2011)

Total assets US$369.56 billion (2011) Total equity US$18.71 billion (2011) Owner(s) Employees Website Government of India 222,933 (2011) www.statebankofindia.com

COMPANYs INDIA

HISTORY

STATE

BANK

OF

The evolution of State Bank of India can be traced back to the first decade of the 19th century. It began with the establishment of the Bank of Calcutta in Calcutta, on 2 June 1806. The bank was 18

redesigned as the Bank of Bengal, three years later, on 2 January 1809. It was the first ever joint-stock bank of the British India, established under the sponsorship of the Government of Bengal. Subsequently, the Bank of Bombay (established on 15 April 1840) and the Bank of Madras (established on 1 July 1843) followed the Bank of Bengal. These three banks dominated the modern banking scenario in India, until when they were amalgamated to form the Imperial Bank of India, on 27 January 1921. An important turning point in the history of State Bank of India is the launch of the first Five Year Plan of independent India, in 1951. The Plan aimed at serving the Indian economy in general and the rural sector of the country, in particular. Until the Plan, the commercial banks of the country, including the Imperial Bank of India, confined their services to the urban sector. Moreover, they were not equipped to respond to the growing needs of the economic revival taking shape in the rural areas of the country. Therefore, in order to serve the economy as a whole and rural sector in particular, the All India Rural Credit Survey Committee recommended the formation of a state-partnered and statesponsored bank. This resulted in making the State Bank of India more powerful, because as much as a quarter of the resources of the Indian banking system were controlled directly by the State. Later on, the State Bank of India (Subsidiary Banks) Act was passed in 1959. SBI is a regional banking behemoth and is one of the largest financial institutions in the world. It has a market share among Indian commercial banks of about 20% in deposits and loans. The State Bank of India is the 29th most reputed company in the world according to Forbes. Also, SBI is the only bank featured in the coveted "top 10 brands of India" list in an annual survey conducted by Brand Finance and The Economic Times in 2010. The State Bank of India is the largest of the Big Four banks of India, along with ICICI, PNB and HDFCits main competitors. Instead of serving as mere repositories of the community's savings and lending to creditworthy parties, the State Bank of India catered to the needs of the customers, by banking purposefully. The bank served the heterogeneous financial needs of the planned economic development.

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RESEARCH METHODOLOGY
Problem Definition The purpose of the study is to assess the depth of the market where other banks are issuing POS terminals and are providing cash pick-up facilities to the market. During this phase of market research, we tried to figure out the reason behind the absence of SBIS POS terminal. Approach Development In order to deal effectively with this problem we visited various shops in Lucknow and our interaction with those dealers, formed the basis of our study. Keeping in mind the information needed, we prepared questionnaire to understand the prevailing condition of merchant acquiring business in a card present environment. In this process, our discussion with the dealers helped us to understand the pros and cons of using such facilities. Research Design Research design specifies the details of the procedures necessary for obtaining information needed to structure or solve the research problem. Research design adopted was exploratory in nature, wherein we identified relevant courses of action and gained additional insights before formulating an approach to the problem. The findings are tentative and can be used to inputs to further research. Our research involves comparative scaling techniques, with which we are able to rank the performance of various public sector and private banks. Data collection Initially secondary data in form of banks circulars, companys website and various other official documents were collected. This helped us in formulating an appropriate research design and interpreting the primary data more insightfully. Our study concentrates basically on the primary sources which includes the sales force and the merchants possessing POS terminals and using cash pick-up services. The concerned departments and the organizations have been approach to get insights and relevant

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statistics on this topic. The field survey has been conducted in various showrooms of Hazratganj and Sahara Ganj mall by asking questions and recording answers by means of a standardized questionnaire. We have adopted a simple random sampling technique and our sample size is 100. Data preparation and analysis Our data preparation process is guided by the preliminary plan of data analysis that was formulated in the research design phase. The questionnaire was designed keeping in view the reluctance of the dealers to easily part with the information and personal experiences. The questions were both open ended and close ended. While our field work was still underway, we edited our questionnaire by reconstructing such questions which required the dealers to disclose their average sales. We were required to clean the data by treating the missing responses because many dealers were not aware of the POS rates and cash pick-up charges due to the centralized procedures of the companies. The questionnaire were analyzed to find out the duration of usage, type of POS terminals, initial cost of POS installation, charges and other facilities like cash pick-up and concession in pricing. OBSERVATIONS Owing to the leadership of the private players, the merchant acquiring business is immensely dominated by Axis bank, HDFC and agencies like CMS. Our observation has revealed that dealers have been using the POS terminals for a long time. Most of the shopkeepers use POS through PSTN and majority of them operate through Airtel landline. Another information, that surfaced was that the initial cost of POS installation and instrument was completely borne by the bank. During this survey we have realized that most of the sales were made in cash and the majority of cards swapped through the terminal were those of SBI.

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RESULTS AND FINDINGS

The data obtained from the questionnaire has helped us to derive such information. TABLE - B1
Have you ever used a POS machine? yes No not aware 71% 20% 9%

FIGURE-1

During the research it has been observed that most of the dealers used POS machines whereas a few of them were not aware of it. Out of the hundred shops that we surveyed 71% used POS machines whereas 9% were not aware of it and 20% made sales only through cash.

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TABLE-B2
Duration of POS usage 1 year 22 1-3 years 28 3 years & above 50

FIGURE-2

Most of the respondents agreed to having used the POS machines for a long time. 50% of the shopkeepers have been using the machines for more than three years, 28% for less than three years and 22% for about a year.

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TABLE-B3
% of banks issuing POS HSBC 1 Indus 2 Yes Bank 2 Corporation Bank 2 PNB 2 SBI 2 Union Bank 2 Citi Bank 3 IDBI 4 ICICI 8 HDFC 27 AXIS 45

FIGURE-3

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The survey has revealed that most of the dealers use POS terminals of Axis bank(45%) followed by HDFC(27%) and ICICI(8%). During the survey we found that the public sectors banks like PNB and SBI had a negligible market share of 2% each.

TABLE-B4
Bank charges for the transaction through POS Less than 1.2 10 1.2-1.4 31 1.4 & above 35 Not Aware 24

FIGURE-4

During the survey, we found that most of the banks charged 1.4% and above from the dealers for the per transactions usage of the POS terminals. 31% of the respondents agreed to having paid somewhere between 1.2%-1.4% to their respective banks. A small range of respondents said that they paid less than 1.2% whereas 24% of the respondents were not aware of the bank charges.

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TABLE-B5
% of cards swapped through the pos terminal SBI 40 Other Nationalized Banks 10 Private banks 30 Others 20

The survey revealed that most of the customers possessed debit cards of SBI which were being swapped through the POS terminals, followed by the private banks(Axis bank, HDFC, IDBI, etc). The other nationalised banks revealed a low share of 10% in the cards that were being swapped through the POS terminals.

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TABLE-B6
Have you found any difficulty in POS usage? Yes 6% No 84% Missing 6%

Out of a hundred respondents whom we surveyed, a majority of 84% had never faced any difficulty while using a POS machines, whereas 6% had faced a problem of cards swapping for transactions above Rs 5000. And 6% of the responses were missing.

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TABLE-B7
% of sales made through Cash 20% 40% 40% 60% 60% & above

6% 43% 51%

During the survey we found that a majority of sales (51%) was made in cash. 43% of the dealers made cash sales of less than 60% whereas 6% of the respondents made a cash sale of 20-40%.

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TABLE-B8

Have you ever used cash pick-up facility? Yes 35% No 42% not aware 23%

During the survey it was revealed that majority of the dealers (42%) did not use cash pick-up facilities and they themselves deposited cash in the bank. 35% of the respondents used cash pick-up facilities of different banks whereas 23% of the shopkeepers were not aware of this facility.

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TABLE-B9

Use of cash pick- up services of different banks Axis Bank 50% HDFC 12% HSBC 9% Yes Bank 9% Others 20% (Others include-- Taru Visha, WSD, Federal, Induslnd, Kotak & Securitan)

Out of the hundred shops which we surveyed, Axis bank emerged as the market leader in providing cash pick-up services through an 30

agency called CMS. HDFC bank has a market share of 12% followed by HSBC and Yes bank at 9%. The other banks and agencies like Taru Visha, WSD, Federal, Induslnd, Kotak & Securitan were found to make a contribution of 20% in providing cash pick-up services.

Table-B10

Have you ever faced any difficulty in cash pick-up? no 89% yes 2% missing 9%

During our survey, we found that 89% of the respondents had never faced any difficulty in their cash pick-up by the banks. 2% of the respondents were not satisfied with this facility owing to the time constraints whereas 9% of the respondents were not willing to disclose any information.

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LIMITATIONS AND CAVEATS

While coming in contact with the merchants, such problems were highlighted. Lack of adequate shopkeepers/retailers. knowledge among the

Lack of cooperation by the shopkeepers/retailers. Clash of timings with the business hours. Indifferent behavior of the shopkeepers towards us. Unwillingness on part of the dealers to disclose any information. The survey was confined to the regions lying in the vicinity of Lucknow. Direct tie-ups of the companies with the banks proved to be a huge constraint, since the respondents were unaware of the bank charges.

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CONCLUSION

AND RECOMMENDATIONS

Our survey has revealed that Axis bank is the market leader both in terms of point of sale and cash pick-up services. As a matter of fact, we are nowhere in providing such corporate facilities to the merchants. In fact it is not only SBI but all the public sector banks have a negligible market share in this sector. The reason can be the late entry of the public sector banks in this business. With the merchant acquiring business gaining prominence, the State Bank of India has to tap the potential in the market of point of sale and cash pick-up services. Realizing the immense potential in this area we need to work harder on our products, our marketing strategies, and most importantly developing a competitive edge over the other banks operating in the market. With so many other market entrants, SBI needs to capture the market by providing its products at marginal rates and such other value added services. Though SBIs share in POS business is only 2%, it can increase its exposure to many folds by leveraging the available cost benefit of lower MDR rates, focusing more on these products. From the dealers covered in the survey, the major issue that came up was lack of awareness about the existence of such terminals and services of SBI. In such case the bank should take the initiative to promote the services to its existing account holder merchants as well as to other bank account holders. For a quick start up, efforts should be made to depute officers for focused marketing of these products to the dealers and a toll free helpline should be introduced where the merchants could clear their queries on POS usage and quick cash pick- up. These numbers should be properly displayed at major locations via hoardings etc.

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With the increase in card base, the merchant acquiring business has more scope of expanding and the growth in this sector is inevitable if the services are provided in a better and organized manner.

EXHIBITS
QUESTIONNAIRE Name of the unit: Activity: Key Person: Address: Contact No: 1. Do you possess a POS terminal? If yes, Name of the bank/s?______________ 2. Since how long have you been using POS? A) 1year B) 1--3 years C) More than 3 years 3. What type of POS terminal do you use? a) PSTN b) CDMA c) GPRS d) ETHERNET 4. Who bears the initial cost of POS installation, POS machine, etc? a) Bank 34

b) Borrower How much? 5. What are the other facilities; you are availing from the above Bank? a) Deposit a/c b) FDs & RDs c) Loan a/c d) Others,

6. What are the charges for the POS terminal, being charged by your bank? a) Fixed charge b) Variable charge c) Combined charge d)Other Charges, if any 1) 200-400 1)0.20-1.2 (Annual Maintenance 2) 400-800 2)1.2-1.4 Charges, etc)_______ 3) 800 & above 3)1.4 & above

1)500-1000 2)1000-1500 3)1500 & above

7. What are the added services, which you receive with your POS terminal? a) Cash pick-up b) Concessions in pricing c) Others , please specify 8. What are the average sales made through POS terminal per day? a) Less than 1 Lac b) 1 Lac3 Lac c) 3lacs & above 9. What is the sales percentage through cash? A) 20%-40% B) 40%-60% C) 60% & above 10. At what percentage the following cards are swapped through your POS terminal? A) SBI B) Other Nationalized Banks C) ICICI/Axis Bank /HDFC

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D) Others 11. Do you face any difficulty in POS usage, Reconciliation, etc? A) No B) Yes, please specify____________ 12. Are you aware of the cash pick-up facility being provided by the banks and its benefits? a) Yes b) No 13. If yes, which banks pick-up services, you are using? a) PNB b) ICICI c) SBI d) Others, please specify__________________ 14. Cash pick-up is through whom? a) Bank officer b) Outside vendor 15. What are the other facilities you get with your cash pick-up? 16. What is the time lag between cash pick-up and receipt of credit in the account? a) Same day b) Next day c) More than 1 day 17. What is the average cash pick-up per day? a) Upto 2 lacs b) 2-5 lacs c) 6-10 lacs d) More than 10 lacs 18. What is the fee charged by your bank for cash collection per month? a) Upto 1500 b) 1500-3000 c) 3000-4500 d) More than 4500 19. Does your bank provide the facilities of cash pick-up beyond banking hours or on holidays & Sundays? a) No b) If yes, what are the extra charges?

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20. Are you comfortable in giving cash at a place other than bank premises? a) Yes b) No 21. Do you face any difficulties in cash deposits through cash pick-up ? (cash reconciliation, cash shortage, fake notes,etc) a) No b) Yes, please specify__________________ 22. What is the period of settlement cycle? a) Same day b) Next day THANKS FOR YOUR COOPERATION.

STATISTICAL OUTPUT
The study reveals the following output: India has total card base of 230 million (212 million debit & 18 million credit) as on March 2010. SBI has issued over 85 million debit cards (market share > 40%). By increasing the card usage, the customers at branch counters and ATMs may be shifted directly to Merchant Establishments. This will save substantial cost to the Bank. More than 60% of the sales in the small and medium enterprises are made through cash Axis Bank has emerged as the market leader in providing POS terminals, with 45% market share followed by HDFC 27% More than 50% of merchants have been using the POS terminals for about 3 years and above. Majority of the bank charges for the transactions through POS terminals are 1.40% and above. Approximately 40% of the cards swapped through the POS are of SBI.

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 50% of the respondents use cash pickup services of Axis Bank.

LISTS OF SHOPS
Name of the unit: Fastrack Activity: Watches Key person: Mr. Mansoob Ahmad Address: Sahara ganj Contact no: 0522-4004669 Name of the unit: Biba Activity: Suits and Sarees Key person: Mr. Atah Waris Khan Address: Shop no 116, Sahara ganj Contact no: 0522-4009415/16 Name of the unit: Addidas Activity: Apparel Store Key person: Kiran Singh Address: Sahara ganj Contact no: 0522-4008268 Name of the unit: Passport Activity: Apparel Store Key person: Mr Faiz Address: Sahara ganj

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Contact no: 0522-4003766 Name of the unit: Blackberry Activity: Formal wear Key person: Mr Raj Kumar Sonkar Address: Sahara ganj Contact no: 0522-3914480 Name of the unit: Bata Activity: Footwear Key person: Mrs Radha Kant Address: Sahara ganj Contact no: 0522-4103665

Name of the unit: Moda Activity: Apparel store Key person: Mr Hisham Khan Address: Shop no 121, Sahara ganj Contact no: 9936150549 Name of the unit: All Activity: Apparel store Key person: Mr Jai Prakash Mishra Address: Shop no122, Sahara ganj Contact no: 0522-3022455 Name of the unit: Liberty Activity: Footwear Key person: Mr Kaushal Tiwari Address: Shop no 123, Sahara ganj Contact no: 0522-3237098 Name of the unit: American Tourister Activity: Luggage Key person: Mrs Chanda Address: Shop no 124, Sahara ganj Contact no: 0522-3069477 Name of the unit: Pepe jeans Activity: Apparels store Key person: Mr Faiz Address: Shop no 19, Sahara ganj Contact no:

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Name of the unit: Roxton Activity: Apparel Store Key person: Mr. Prashant Address: Sahara Ganj Contact no: 0522 -4021887 Name of the unit: Denizen Activity: Jeans & Shirts Key person: Mr. Vimal Gupta Address: Sahara Ganj Contact no: 9338303086 Name of the unit: Walk In Activity: Footwear Key person: Mr.Shaheer Address: Sahara Ganj Contact no: 0522-4000449 Name of the unit: Tourister Activity: Footwear Key person: Mr.Richar Address: Sahara Ganj Contact no: 0522-4043147 Name of the unit: Half Ticket Activity: Toys Key person: Mr. Mohit Garg Address: Sahara Ganj Contact no: 0522-2626617 Name of the unit: Narangs Chikan Activity: Apparel Store Key person: Mrs.Gurbeen Singh Address: Sahara Ganj Contact no: 0522-3019249 Name of the unit: Club Avis Activity: Apparel Store Key person: Mrs Sukirti Gupta Address: Sahara Ganj Contact no: 8808080086

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Name of the unit: Digital Zone Activity: Camera Key person: Mr. Surendra Yadav Address: Sahara Ganj Contact no: 7800591030 Name of the unit: Cat Moss Activity: Apparel Store Key person: Miss. Anjali Address: Sahara Ganj Contact no: 0522-4008170 Name of the unit: Just Casual Activity: Formal Wear Key person: Mr. Ramesh Address: Sahara Ganj Contact no: 9026604212 Name of the unit: Dollar Store Activity: Apparels & Accesories Key person: Mr. Punit Address: Sahara Ganj Contact no: 9026678944 Name of the unit: Statusquo Activity: Apparel Store Key person: Mr. Sharad Jain Address: Sahara Ganj Contact no: 9415105311 Name of the unit: I Vow Activity: Kids Wear Key person: Mrs Reena Agarwal Address: Sahara Ganj Contact no: 0522-4104708 Name of the unit: Cobb Activity: Apparel Store Key person: Sukriti Gupta Address: Sahara Ganj Contact no: 9415425071 Name of the unit: Nomadic

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Activity:Jeans Key person: Mr. Vishal Address: Sahara Ganj Contact no: 9389916172 Name of the unit: Club Fox Activity: kids Wear Key person: Mr Ravi Address: Sahara Ganj Contact no: 9628004488 Name of the unit: Metro Activity: Footwear Key person: Mr Ashfak Address:Sahara Ganj Contact no: 9335743132 Name of the unit: K.lounge Activity: Apparel Store Key person: Mr Ram Address: Sahara Ganj Contact no: 0522-3934600 Name of the unit: Barbie Activity: Toys Key person: Mr Vaibhav Address: Sahara Ganj Contact no: 0522-4041138 Name of the unit: Addidas Activity: Sports Wear Key person: Mr Rajat Batna Address: Sahara Ganj Contact no: 0522-40444088 Name of the unit: Inc5 Activity: Apparel Store Key person: Mr Manoj Address: Sahara Ganj Contact no: 9670568451 Name of the unit: John Hill Activity: Apparel Store Key person: Mr Akshat Address: Sahara ganj

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Contact no: 0522-2200550 Name of the unit: Home town Activity: Furnishings Key person: Mr Harendra Pal Singh Address: Sahara Ganj Contact no: 0522-4061229

Name of the unit: Subway Activity: Food joint Key person: Mr Abhishek Address: Sahara Ganj Contact no: 0522-4048865 Name of the unit: Jockey Activity: Garments Key person: Mr Manmohan Sahu Address: Sahara Ganj Contact no: 0522-4025584 Name of the unit: Tantra Activity: Apparel Key person: Mr Amit Address: Sahara Ganj Contact no: 0522-411388 Name of the unit: Reynolds Activity: Stationary Key person: Mr Sudhir Kumar Address: Shop no 125, Sahara Ganj Contact no: 0522-4047276 Name of the unit: Madame Activity: Apparel Key person: Mrs Tara Bachani Address: Sahara Ganj Contact no: 9098935639

Name of the unit: Get gorgeous Activity: Apparel Key person: Mr Assam Address: Sahara Ganj

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Contact no: 9935037372 Name of the unit: Van Heusen Activity: Apparel Store Key person: Mr Pawan Mikija Address: Hazratganj Contact no: 0522-4073150 Name of the unit: Allen Solly Activity: Apparel Store Key person: Mr Siddharth Address: Hazratganj Contact no: 0522-4048421 Name of the unit: United Colors of Benetton Activity: Apparel Store Key person: Ismile Address: Hazratganj Contact no: 0522-4103349 Name of the unit: Puma Activity: T-Shirts/Jeans Key person: Mr Rakesh Address: Hazratganj Contact no: 8009881761 Name of the unit: A.R.A Agency Activity: Apparel Store Key person: Mr Fahad Address: Hazratganj Contact no: 0522-3050282 Name of the unit: Indian Terrain Activity: Apparel Store Key person: Mr Anshul Address: Hazratganj Contact no: 0522-4073456 Name of the unit: Raymonds Activity: Apparel Store Key person: Mr Sumit Manglani Address: Hazratganj Contact no: 0522-4070782 Name of the unit: Modern Silk House Activity: Apparel Store

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Key person: Prem Nath Dikshit Address: Hazratganj Contact no: 0522-2628200 Name of the unit: Nike Activity: Apparel Store Key person: Mr Shiraj Address: Hazratganj Contact no: 9161800002 Name of the unit: Apna Store Activity: Cosmetic & Garments Key person: Mr Sanjeev Address: Sahara Ganj Contact no: 0522-2200670 Name of the unit: Fahrenheit Activity: Apparel Store Key person: Mrs Shipra Yadav Address: sahara Ganj Contact no: 0522-4040585 Name of the unit: Planet Sports Activity: Sports & Accessories Key person: Mr Vikram Address: Sahara Ganj Contact no: 9454496977 Name of the unit: Reebok Activity: Sports Wear Key person: Mr Jagdeep Address: Sahara Ganj Contact no: 0522-4021908 Name of the unit: Numeruno Activity: Denims Key person: Mr Brijesh Address: Sahara Ganj Contact no: 0522-4008285 Name of the unit: Indian Terrain Activity:Apparel Store Key person: Mr Kamlesh Joshi

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Address: Sahara Ganj Contact no: 0522-4010080 Name of the unit: Moustache Activity: Apparel Store Key person: Mr Ranjit Roy Address: Sahara Ganj Contact no: 0522-4016830 Name of the unit: Peter England Activity: Apparel Store Key person: Mrs Maya Pati Kushwaha Address: Shop no 108,Sahara Ganj Contact no: 0522-4004379 Name of the unit: Turtle Activity: Apparel Store Key person: Miss Swati Address: Sahara Ganj Contact no: 0522-4077218 Name of the unit: Planet Fashion Activity: Apparel Store Key person: Miss Deepali Address: Sahara Ganj Contact no: 0522-400429 Name of the unit: Levis Activity: Apparel Store Key person: Mr Sanjeev Srivastav Address: Sahara Ganj Contact no: 9621894494 Name of the unit: The Body Shop Activity: Cosmetic Key person: Miss Shadia Khan Address: Sahara Ganj Contact no: 0522-4006672 Name of the unit: Jashn Activity: Sarees & Dress Material Key person: Mr Ghanshyam Address: Sahara Ganj

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Contact no: 0522-3239901 Name of the unit: Arrow Activity: Shirts Key person: Mr Jai Suresh Address: Hazratganj Contact no: 0522-4105976 Name of the unit: Suri Fashion Activity: Toys & garments Key person: Mr Ashutosh Address: Sahara Ganj Contact no: 8604631157 Name of the unit: Denizen Activity: Apparel Store Key person: Amit Address: Sahara Ganj Contact no: 9565128030 Name of the unit: Poze Activity: Apparel Store Key person: Mr Mohd Faiz Address: sahara ganj Contact no: 7897617655 Name of the unit: Spring Travels Activity: Air Tickets Key person: Mr Anilah Banerjee Address: Sahara Ganj Contact no: 9839348383 Name of the unit: Moda Activity: Footwear Key person: Mr Dipesh Address: Sahara Ganj Contact no: 0522-4028581 Name of the unit: Lee Activity: Apparel Store Key person: Mr Arvind Address: Sahara Ganj Contact no: 0522-4071116

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Name of the unit: Provogue Activity: Apparel Store Key person: Mr Durgesh Dixit Address: Sahara Ganj Contact no: 9839190657 Name of the unit: Manyawar Activity: Groom Wear Key person: Mr Arun Chatri Address: Sahara Ganj Contact no: 0522-4066690 Name of the unit: Woodland Activity: Footwear, apparel & Accessories Key person: Mr Akash Address: Sahara Ganj Contact no: 0522-6453423 Name of the unit: Time Factory Activity: Watches Key person: Mr. Vikas Sharma Address: Sahara Ganj Contact no: 988919975 Name of the unit: Wills Activity: Apparel Key person: Mr Devashish Address: Sahara Ganj Contact no: 8604007007 Name of the unit: Modern Silk House Activity: Clothes Key person: Mr Jashnani Address: Hazratganj Contact no: 0522-2210003 Name of the unit: Liliput Activity: Kids Wear Key person: Miss Ritika Address: Sahara Ganj Contact no: 9628916342

Name of the unit: Nike Activity: Footwear Key person: Mr Siraj Ahmed

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Address: Hazratganj Contact no: 9161800002

Name of the unit: Monte Carlo Activity: Apparel Key person: Mr Atul Rajpal Address: Sahara Ganj Contact no: 0522-40626100

Name of the unit: Vision 360 Activity: Spectacles Key person: Mr Ashish Srivastav Address: Hazratganj Contact no: 0522-3212770 Name of the unit: Jumbo Electronics Activity: Electronics Key person: Mr Gurinder Address: Hazratganj Contact no: 9794906374 Name of the unit: Time Factory Activity: Watches Key person: Mr Vikas Mishra Address: Hazratganj Contact no: 9889199775 Name of the unit: Lula Bros Activity: Garments,Textiles Key person: Mr Kumar Bhambhawani Address: Hazratganj Contact no: 0522-4072348

Name of the unit: Tommy Hilfiger Activity: Apparel Key person: Address: Hazratganj Name of the unit: Universal Watch House Activity: Watches Key person: Mr Mohammad Sohail Address: Hazratganj

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Contact no: 0522-4047945 Name of the unit: Devi Radio Grams Activity: Electronics & Luggage Key person: Mr V. Mishra Address: Hazratganj Contact no: 0522-4016160 Name of the unit: New Jain Watches Activity: Watches Key person: Mr Pankaj Jain Address: Hazratganj Contact no: 0522-4016424 Name of the unit: Lahore Opticals Activity: Opticals Key person: Mr Anil Kapoor Address: Hazratganj Contact no: 9339507501 Name of the unit: Daksh Distribution & Services Pvt. LTD Activity: HP PRODUCTS Key person: Mr Arvind Tiwari Address: Hazratganj Contact no: 0522-226001 Name of the unit: Royal Cafe Activity: Restaurant Key person: Mr Singh Address: Hazratganj Contact no: Name of the unit: Bata Activity: Footwear Key person: Mr K. Sengupta Address: Hazratganj Contact no: 0522-2621790 Name of the unit: Kohli Bros Activity: Apparel Key person: Mr Sandeep Kohli Address: Hazratganj Contact no: 0522-3298551

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Name of the unit: Samsung Activity: Mobile Key person: Mr J k Vahl Address: Hazratganj Contact no: 0522-4021777 Name of the unit: Mufti Activity: Jeans & Shirts Key person: Mr Rajeev Kumar Address: Hazratganj Contact no: 0522-4072101 Name of the unit: ABC Ganj Opticals Activity: Opticals Key person: Mr Vivek Motwani Address: Hazratganj Contact no: 9335246322 Name of the unit: Meena Bazaar Activity: Sarees Key person: Mr Dheeraj Dimla Address: Hazratganj Contact no: 0522-2232696 Name of the unit: Calcutta in Style Activity: Sarees & Lehnga Key person: Mr Guncharan Singh Address: Hazratganj Contact no: 0522-3918307 Name of the unit: Sugnamal Activity: Apparel Key person: Mr Jaddish Jagnani Address: Hazratganj Contact no: 9336844902 Name of the unit: Ada Activity: Apparel Key person: Mr Vinod Punjabi Address: Hazratganj Contact no: 0522-4002532 Name of the unit: A. James & Co.

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Activity: Apparel Key person: Mr Ram Bachani Address: Hazratganj Contact no: 0522-3919748 Name of the unit: Hush Puppies Activity: Footwear Key person: Mr Faizan Address: Hazratganj Contact no: 0522-4017373

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