India Insight

India’s debit card safety rule boosts sales of payment processing firms

Companies that help in processing card payments look set to benefit from rising demand for portable card swipe machines after the Reserve Bank of India adopted new rules to prevent fraud and enhance security.

Merchants in India usually swipe cards through a reader to generate receipts that customers sign, but the new rule, effective Dec. 1, adds another layer of security by making debit card holders enter their personal identification numbers to validate transactions via these machines, also referred to as point-of-sale (POS) terminals.

Businesses such as fuel stations, hotels and restaurants that normally keep their card machines out of the customer’s reach will have to buy the portable, GPRS-enabled devices to offer convenience to clients.

Sunith Menon, India’s managing director for France-based Ingenico S.A., which manufactures such devices and supplies them to various banks, expects revenue to rise by 20 percent as demand for the wireless POS terminals rises after the new RBI mandate.

“We are seeing an increased requirement coming in from banks,” he said, adding that ICICI-First Data, Bank of Baroda and Axis Bank were among those who have placed orders for GPRS-enabled POS terminals.

Dark horse Tech Mahindra wins race to acquire Satyam

Tech Mahindra, part of Indian business group Mahindra & Mahindra, won the race to acquire Satyam Computer Services on Monday, in a deal that’ll help the mid-sized outsourcer gain in size and also lift clarity on Satyam’s fate.

In a race that saw only a handful of bidders, Tech Mahindra beat rivals such as engineering conglomerate Larsen & Toubro and U.S.-listed Cognizant Technologies. Tech Mahindra agreed to buy a 31 percent stake in Satyam at 58 rupees, a 23 percent premium to Satyam’s last closing price.

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Tech Mahindra, established more than 20 years ago as a joint venture between Mahindra & Mahindra and British Telecom, faces the daunting task of reshaping Satyam, a company at the heart of India’s biggest corporate scandal.

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