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HDFC Bank Builds Secure E-Commerce, Net Banking

The Housing and Development Finance Corp. (HDFC) Bank is building a secure payments gateway for e-commerce. Full service Internet banking and smart cards are in the works for June 1999.

The bank also plan to offer the facility to purchase goods online once its Internet banking is up and running through tie-ups with other Web merchants.

Apart from this, the bank is also expanding to cities like Vijaywada, Mysore and Jaipur and expanding its ATM network by adding 30 ATMs over the current fiscal.

About 10 to 15 percent of its ATMs are likely to be off-site ATM at areas like petrol pumps.

The HDFC Bank has announced that it has become the first bank in India to link up its ATM network with all the three major payment systems worldwide.

HDFC Bank senior manager Munish Mittal said that HDFC Bank will be the first bank in the Asia-Pacific region to connect the American Express (Amex) payment system. Using this system, Amex cardholders will be able to withdraw cash from any of HDFC Bank's 50 ATMs in India.

The bank will earn a transaction fee in addition to being reimbursed the amount paid out.

This is currently in the range of Rs 72-75 (US$ 1.68-1.75) for a domestic card transactions and US$2.25 for an overseas card transaction on the Mastercard cards.

According to Mittal, by leveraging its ATM investments by integration with other global payment systems, the bank has managed to cut its pay-back period on ATM investments by more than half to approximately two years.

HDFC Bank executive vice president C.N. Ram said that Amex had several million cardholders overseas, a substantial portion of which visit India either for business or holiday. Ram added that HDFC Bank would launch debit cards like the Visa Electron by late June or early July 1999.

"We have tied up with Visa because they already have about 5,000 electronic data capture terminals which can be used to process debit card transactions," Mittal added.

The bank plans to have 100 terminals of its own and charge a nominal fee for debit cards which is likely to be one third of that charged for credit cards.

Mittal said that the bank had the largest number of ATM transactions per month (3.8 lakh) for any bank in India.

The bank provides dual language support, that is, operations in English or a regional language like Hindi, Bengali or Tamil-based on the location of the ATM.

The bank also offers a facility to make utility bill payments for its customers to BEST, BSES, Max Touch, BPL Mobile and Airtel and schools like Bombay Scottish in Mumbai via ATMs or tele-banking.

"We are also speaking to MTNL for bill payments in Mumbai and Department of Telecommunications in Chennai, MSEB and a couple of schools in Mumbai and Calcutta to offer ATM based fees/bill payment facility," Mittal added.