State Bank of India and Hitachi Payment Services announced the start of operations of their payment processing venture in India as India's largest bank tries to stay on top of the merchant-payment business.\n\n\n\nHitachi took a 26% stake in SBI Payments in January for an undisclosed amount.\n\n\n\nSBI Payments was already India's biggest merchant-enabler payment company with an estimated 6 lakh point-of-sale terminals. The JV will help SBI modernize the payments services.\n\n\n\nSBI said bringing Hitachi Payment Services, a 100% subsidiary of Japan-based Hitachi Group, will help bring "Artificial Intelligence and other technological capabilities" developed by the Japanese company. It will offer solutions that help merchants to accept payment via cards, QR codes, UPI and other methods. \n\n\n\nSBI faces a threat to its traditional dominant position in the market due to the emergence of more nimble and lower cost operators like PhonePe and PayTM, which use more advanced technology to keep costs low.\n\n\n\nMany merchants prefer taking payment using apps such as PhonePe and PayTM compared to plastic cards as apps are often more cost-effective for them.\n\n\n\n"Through this Joint Venture, we aim to maintain our position as the top acquirer in the merchant digital payments space by providing technologically superior and seamless services to our customers," said SBI Chairman Rajnish Kumar. \n\n\n\n"We will also utilise business analytics to develop strategies to penetrate into hitherto untouched Indian towns and cities through merchant centric digital payments solutions."\n\n\n\nSBI Payments currently has more than 16 lakh merchant payment acceptance touch points in India. The company said it has migrated more than 80% of its transactions to "alternate delivery channels."\n\n\n\n"The joint venture is expected to take this initiative further," it said, without explaining what alternative delivery channels refers to.\n\n\n\nThe bank has been pushing alternate payment methods like its 'all-in-one' app Yono.\n\n\n\nHitachi has already been a supplier of services to SBI since 2011. \n\n\n\nHitachi provides ATM Services, cash recycling machines, POS processing services, toll & transit Solutions and other card and digital acceptance payment network services.