Q 1 - What Is Merchant Acquiring Business (MAB) ?

Merchant Acquiring Business: FAQs
Q 1 – What is Merchant Acquiring Business (MAB)?
MAB is primarily referred to as the mechanism of providing necessary

infrastructure and facilitating payment for goods and services purchased
through medium of a card.
Q2 – Who is the regulator for MAB in India?
Reserve Bank of India.
Q3 – Who are various stakeholders in MAB ?
Issuer: The Bank that issues cards.

Cardholder: Customer / Non customer using card for making payment.
Merchant: Entity which accepts payments through cards.
Acquirer: The Bank that provides necessary infrastructure to the
merchant to accept payment, maintains relationship and facilitate
acceptance payments thru cards.
Intermediary Agency: Visa or MasterCard who facilitate interbank
settlements.
Q4 – What are the important terms used in MAB?
Merchant Discount Rate (MDR): The commission charged by the

acquirer (SBI) to the Merchant (Trader/Service Provider). It is also
termed as Merchant Service Fee (MSF).
Interchange: The incentive paid by the Acquirer Bank to the Card Issuer
Bank for promoting payment through cards.
Scheme Fee: The service fee paid to intermediary agencies i.e.
MasterCard or Visa for facilitating interbank payments.
On -Us Transaction: Where issuer and acquirer is same (e.g. SBI Debit
Card on SBI POS terminal)
Off-Us Transaction: Where issuer and acquirer are different (e.g. Other
bank’s debit/credit card on our POS terminals.)
State Bank of India Merchant Acquiring Business

Q 5 – How MAB is beneficial to Cardholder and Merchant ?
Cardholder
 Need not carry cash, which is risky.
 Maintains higher balances in the account resulting in higher interest on

deposits.
 Saves time and money in visiting bank branch / ATM to withdraw money
and spend the same at merchant outlet, who has to again deposit the
same in Bank.
 The time saved results in lower cost and higher productivity as time
saved can be gainfully utilised.
B. Merchant
 Cash handling is avoided.
 The customers have tendency to higher purchases/impulsive buying
while using the card than cash, thus more sales and higher profits.
 The customer stickiness to merchant increases due to the facility.
 The facility can also have provision for customer loyalty points which are
widely used to attract the customer to the outlet repeatedly.
 Additional revenue stream from value added services such as Cash @

POS, Mobile Top up, Remittances etc.(yet to be introduced)
Q 6 – How many types of POS terminals are issued by SBI?
Three types.
o PSTN,
o Desktop GPRS and
o Portable GPRS.
o Mobile POS.
Q 7 – What are the pre-requisites for signing the Merchant?
KYC Compliance. Merchant needs to provide necessary documents

2
regarding the proof of business, address proof, photo identity proof of the
proprietor/partner/key promoters etc.
Availability of Connectivity PSTN with STD at Merchant Location (Cost to be
borne by the Merchant). If land line is not available, GPRS either desktop
or portable as per the customers’ choice.
Opening/identification of account for settlement of transactions with

SBI.
Acceptance of Merchant Service Fee (MSF)/ Merchant Discount Rate

(MDR) by the Merchant offered by Bank.
Finalization of settlement period (T+1,T+2, T+3)
Merchants’ consent for execution of Merchant Establishment

Agreement between Bank and Merchant. POS terminal shall be installed
only after the execution of ME agreement.
Q 8 – Where and how a merchant can apply for installation of POS terminal
at his shop/establishment?
Merchant can contact the branch of State Bank of India.

The application form is readily available on our web-site sbi.co.in, which
may be downloaded, filled and submitted to the branch along with KYC
documents to save time.
Merchant can apply online using link available under onlinesbi. The link is
as under
www.onlinesbi.com → Other services → Merchant Acquiring Business
Q 9 – Whether merchant has to pay for POS terminal?
No, merchant is not required to pay anything towards cost of terminal.

POS terminal is installed at absolutely free of cost. The cost for
procurement of terminal and also the maintenance of terminal is borne by
the Bank.

3
Q 10 – Whether merchants are required to pay any other charges than MDR.
Yes, some nominal charges as under:
Type of Terminal Monthly Rental (Rs.) Monthly Call charges

PSTN Nil Actual
Desktop GPRS Nominal Charges Actual
Portable GPRS Nominal Charges Actual
Mobile POS Cost of Dongle Actual
Q 11– What are the Do’s and Don’ts for merchants?
Do’s
 Merchants must accept all cards when properly presented as

payments for transactions.
 Bring to the notice of the bank any fraudulent activities.
 In case of any problems with the machine, call the helpline number-
18004254627 or other Circle-wise numbers given above.
 Verify the card holder’s signature with the one below the strip of the
card
 Perform settlement on POS terminal at-least once in a day;
settlement may be done by merchant as many times as he wish. If
not done amount shall not be credited in customer’s settlement
Account.
Don’ts
 Merchant must not disclose details of the card or cardholders to any

third party.
 Impose any extra charge or surcharge (unless expressly allowed by local

law).
 Indulge in any fraudulent activity.

4
Q 12– Why a Merchant should opt for SBI POS machine?
 No Installation charges.
 Cost of terminals borne by Bank.
 Lower minimum current account balance vis-a`-vis other players.
 No hidden costs.
 SBI network is present across all geographies.
 Many Value added services like Cash@POS, Merchant Loyalty point and
tiered pricing, bill payments, mobile top-up, securitization of receivables
are proposed.
 Merchant has access to transactions done on his / her terminal(s) after
logging in the application.
 Customized MIS at weekly/fortnightly/monthly intervals are made
available.
 Merchant will have access to other products of SBI.
 Large card base. Over 155 million cards have been issued by SBI to its
customers. SBI charges very low MDR on the use of these cards on its
terminals, which saves cost for the Merchant.
Q 13 – Which value added services are being offered on SBI POS Terminals?
Cash @ POS
Q 14 – Which value added services are proposed to be provided through

POS Terminals?
Merchant loyalty points and tiered pricing could be adopted

Bill payments
Mobile Top up
Securitization of receivables
State Bank of India 5 Merchant Acquiring Business

Q 1 - What Is Merchant Acquiring Business (MAB) ?

Uploaded by

Copyright:

Available Formats

Q 1 - What Is Merchant Acquiring Business (MAB) ?

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Q 1 - What Is Merchant Acquiring Business (MAB) ?

Uploaded by

Copyright:

Available Formats

Merchant Acquiring Business: FAQs

Q 1 – What is Merchant Acquiring Business (MAB)?

MAB is primarily referred to as the mechanism of providing necessary

Q2 – Who is the regulator for MAB in India?

Reserve Bank of India.

Q3 – Who are various stakeholders in MAB ?

Issuer: The Bank that issues cards.

Q4 – What are the important terms used in MAB?

Merchant Discount Rate (MDR): The commission charged by the

State Bank of India Merchant Acquiring Business

 Need not carry cash, which is risky.

 Maintains higher balances in the account resulting in higher interest on

 Additional revenue stream from value added services such as Cash @

Q 6 – How many types of POS terminals are issued by SBI?

Q 7 – What are the pre-requisites for signing the Merchant?

KYC Compliance. Merchant needs to provide necessary documents

Opening/identification of account for settlement of transactions with

Acceptance of Merchant Service Fee (MSF)/ Merchant Discount Rate

Finalization of settlement period (T+1,T+2, T+3)

Merchants’ consent for execution of Merchant Establishment

Merchant can contact the branch of State Bank of India.

Q 9 – Whether merchant has to pay for POS terminal?

No, merchant is not required to pay anything towards cost of terminal.

State Bank of India Merchant Acquiring Business

Yes, some nominal charges as under:

Type of Terminal Monthly Rental (Rs.) Monthly Call charges

Q 11– What are the Do’s and Don’ts for merchants?

 Merchants must accept all cards when properly presented as

 Bring to the notice of the bank any fraudulent activities.

 Merchant must not disclose details of the card or cardholders to any

 Impose any extra charge or surcharge (unless expressly allowed by local

 Indulge in any fraudulent activity.

State Bank of India Merchant Acquiring Business

Q 14 – Which value added services are proposed to be provided through

Merchant loyalty points and tiered pricing could be adopted

State Bank of India 5 Merchant Acquiring Business

You might also like