A project report on the perception of the customer about edc terminals at hdfc

THE PERCEPTION OF THE CUSTOMER ABOUT EDC
TERMINALS AT HDFC

Contents

1. Executive Summary

2. About HDFC

3. Product Profile

4. Background of the Problem

5. Objectives

6. Methodology

7. Findings

8. Suggestions

9. Conclusion

10. Annexure

11. Bibliography

Babasabpatilfreepptmba.com Page 1

TERMINALS AT HDFC

EXECUTIVE SUMMARY

The growth of the banking industry is imperative for the economic
development of the country. Banks have become customer – centric and
customer relationship management has become a key component of the service
provided by the banking sector. The HDFC Corporation Limited was amongst
the first to receive an ‘in-principle’ approval from the Reserve Bank of India.
HDFC Bank started electronic data capture (EDC) Service in Bangalore on
January 2002.

The Study was done in and around Bangalore City with a sample size of
200 merchants. It was done to find out the perception of customers about EDC
terminals and to design promotion strategies for HDFC’s EDC Terminal. The
research has made to analyze the efficiency of the present system and to find out
the brand equity of banks providing EDC service. The data collected through the
questionnaires and telephone interviews were tabulated and analyze meaningfully.

Finally, recommendations have been given in order to promote sales of

EDC machine in Bangalore market.

INTRODUCTION


TERMINALS AT HDFC

The Housing Development Finance Corporation Limited (HDFC) was
amongst the first to receive an ‘in-principle’ approval from the Reserve Bank of
India (RBI) to set up a bank in the private sector, as part of the RBI’s
liberalization of the Indian Banking Industry in 1994. The bank was incorporated
in August 1994 in the name of ‘HDFC Bank Limited’, with its registered office in
Mumbai, India. HDFC Bank commenced operations as a Scheduled Commercial
Bank in January 1995.

Promoter
HDFC in India’s premier housing finance company and enjoys an
impeccable track record in India as well as in international markets. Since its
inception in 1977, the Corporation has maintained a consistent and healthy growth
in its operations to remain a market leader in mortgages in India. Its outstanding
loan portfolio covers well over a million dwelling units. HDFC has developed
significant expertise in retail mortgage loans to different market segments and
also has a large corporate client base for its housing related credit facilities. With
its experience in the financial markets, a strong market reputation, large
shareholder base and unique consumer franchise, HDFC was ideally positioned to
promote a bank in the Indian environment.

Business Focus
HDFC Bank’s mission is to be a World-Class Indian Bank. The Bank’s
aim is to build sound customer franchises across distinct businesses so as to be the
preferred provider of banking services in the niche segments that the bank
operates in and to achieve healthy growth in profitability, consistent with the
bank’s risk appetite. The bank is committed to maintain the highest level of
ethical standards, professional integrity and regulatory compliance. HDFC Bank’s
business philosophy is based on four core values: Operational Excellence,
Customer Focus, Product Leadership and People.


TERMINALS AT HDFC

Capital Structure
The authorized capital of HDFC Bank is Rs. 450 core (Rs. 45 billion). The
paid-up capital is Rs. 282 core (Rs. 28.2 billion). The HDFC Group holds 24.4%
of the bank’s equity while about 13.2% of the equity is held by the depository in
respect of the bank’s issue of American Depository Shares (ADS/ADR Issue).
The Indian Private Equity Fund, Mauritius (IPEF) and Indocean Financial
Holding Ltd., Mauritius (IFHL) (both funds advised by J P Morgan Partners,
formerly Chase Capital Partners) together holds about 5.5% of the bank’s equity.
Roughly 23% of the equity is held by FIIs, NRIs, and OCBs while the balance is
widely held by about 250,000 shareholders. The shares are listed on The Stock
Exchange, Mumbai and the National Stock Exchange. The bank’s American
Depository Shares are listed on the New York Stock Exchange (NYSE) under the
symbol “HDB”.

Times Bank Amalgamation
In the milestone transaction in the Indian banking industry, Times Bank
Limited (another new private sector bank promoted by Bennett, Coleman &
Co. /Times Group) was merged with HDFC Bank Ltd., effective February 26,
2000. As per the scheme of amalgamation approved by the shareholders of both
banks and the Reserve Bank of India, shareholders of Times Bank received 1
share of HDFC Bank for every 5.75 shares of Times Bank. The amalgamation
added significant value to HDFC Bank in terms of increased branch network,
expanded geographic reach, enhance customer base, skilled manpower and the
opportunity to cross-sell and leverage alternative delivery channels.


TERMINALS AT HDFC

Distribution Network
HDFC Bank is headquartered in Mumbai. The Bank at present has an
enviable network of over 289 branches spread over 151 cities across the country.
All branches are linked on an online real-time basis. Customers in 80 locations are
also serviced through Phone Banking. The Bank’s expansion plans take into
account the need to have a presence in all major industrial and commercial centres
where its corporate customers are located as well as the need to build a strong
retail customer base for both deposits and loan products. Being a
clearing/settlement bank to various leading stock exchanges, the Bank has
branches in the centers where the NSE/BSE have a strong and active member
base. The Bank also has a network of over 750 network ATMs across these cities.
Moreover, HDFC Bank’s ATM network can be accessed by all domestic and
international Visa/Master Card, Visa Electron/Maestro, Plus/Cirrus and American
Express Credit/Charge cardholders.

Management
Mr. Jagdish Capoor took over as the bank’s Chairman in July 2001. Prior
to this, Mr. Capoor was a Deputy Governor of the Reserve Bank of India.
The Managing director, Mr. Aditya Puri, has been a professional banker
for over 25 years, and before joining HDFC Bank in 1994 was heading Citibank’s
operations in Malaysia.
The Bank’s Board of Directors is composed of eminent individuals with a
wealth of experience in public policy, administration, industry and commercial
banking. Senior executives representing HDFC are also on the Board.
Senior banking professionals with substantial experience in India and
abroad head various businesses and functions and report to the Managing
Director. Given the professional expertise of the management team and the
overall focus on recruiting and retaining the best talent in the industry, the bank
believes that its people are a significant competitive strength.


TERMINALS AT HDFC

Composition of the Board of Directors
The composition of the Board of Directors of the Bank is governed by the
Banking Regulation Act, 1949 and clause 49 of the Listing Agreement. The Board
has strength of 9 directors as on 31 March, 2003. The Board has a combination of
Executive and Non-Executive Directors. Mr. Jagdish Capoor, continues to be a
Non-Executive Chairman and more than one half of the total number of directors
are independent directors.

The Board consists of eminent persons with considerable professional
expertise and experience in banking, finance and other related fields as specified
in the Banking Regulation Act, 1949. As required by the said Act, the Board also
has two directors viz. Dr. (Mrs.) Amla Samanta and Dr. Venkat Rao Gadwal with
specialized knowledge and experience in the small scale industry and agricultural
sector respectively.

Two directors, Mrs. Renu Karnad and Mr. Keli Mistry represent the
HDFC Group (the promoters) on the Board of the Bank. Mr. Anil Ahuja has been
nominated on the Board by the Strategic investors viz, The India Private Equity
Fund (Mauritius) and Indocean Financial Holding Ltd. Since the shareholding of
the strategic investors has been reduced to less than 7% of the share capital of the
Bank, Mr. Ahuja no more represents the strategic investors and now he is on the
Board in his individual capacity. Mr. Vineet Jain represents the Bennett and
Coleman Group.

All directors other than Mr. Aditya Puri, Managing Director are non-
executive directors on the Board.

All directors other than Mr. Aditya Puri, Mr. Keki Mistry and Mrs. Renu
Karnad are Independent Directors on the Board.


TERMINALS AT HDFC

The Bank has not entered into any materially significant transactions,
which could have a potential conflict of interest with the Bank, with its promoters,
directors, management or relatives etc. other than the transactions entered into in
the normal course of banking business.

Technology
HDFC Bank operates in a highly automated environment in terms of
information technology and communication systems. The entire bank’s branches
have connectivity which enables the bank to offer speedy funds transfer facilities
to its customers. Multi-branch access is also provided to retail customers through
the branch network and Automated Teller Machines (ATMs). The Bank has made
substantial efforts and investments in acquiring the best technology available
internationally to build the infrastructure for a world-class bank.

In terms of software, the Corporate Banking business is supported by Flex
cube, while the Retail banking business by Fin ware, both from i-flex Solutions
Ltd. The systems are open, scaleable and web-enabled.

The Bank has prioritized its engagement in technology and the internet as
one of its key goals and has already made significant progress in web-enabling its
core businesses. In each of its businesses, the Bank has succeeded in leveraging
its market position, expertise and technology to create a competitive advantage
and build market share.

Business Profile
HDFC Bank caters to a wide range of banking services covering
commercial and investment banking on the wholesale side and
transactional/branch banking on the retail side. The bank has three key business
areas:-


TERMINALS AT HDFC

a) Wholesale Banking Services
The Bank’s target market is primarily large, blue-chip
manufacturing companies in the Indian corporate sector and to a lesser
extent, emerging mid-sized corporate. For these corporate, the Bank
provides a wide range of commercial and transactional banking services,
including working capital finance, trade services, transactional services,
cash management, etc. The bank is also a leading provider of structured
solutions, which combine cash management services with vendor and
distributor finance for facilitating superior supply chain management for
its corporate customers.

Based on its superior product delivery/service levels and strong
customer orientation, the Bank has made significant inroads into the
banking consortia of a number of leading Indian corporate including
multinationals, companies from the domestic business houses and prime
Public Sector companies It is recognized as a leading provider of cash
management and transactional banking solutions to corporate customers,
mutual funds, stock exchange members and banks.

b) Retail Banking Services
The objective of the Retail Bank is to provide its target market
customers a full range of financial products and banking services, giving
the customer a one-stop window for all his/her banking requirements. The
products are backed by world-class service and delivered to the customers
through the growing branch network, as well as through alternative
delivery channels like ATMs, Phone Banking, Net Banking and Mobile
Banking.

The HDFC Bank Preferred program for high net worth individuals,
the HDFC Bank Plus and the Investment Advisory Services programs


TERMINALS AT HDFC

have been designed keeping in mind needs of customers who distinct
financial solutions, information and advice on various investment avenues.
The Bank also has a wide array of retail loan products including
Auto Loans, Loans against marketable securities, Personal Loans and
Loans for Two-wheelers. It is also a leading provider of Depository
Services to retail customers offering customers the facility to hold their
investment in electronic form.

HDFC Bank was the first bank in India to launch an International
Debit Card in association with VISA (VISA Electron) and issues the
Master Card Maestro debit card as well. The debit card allows the user to
directly debit his account at the point of purchase at a merchant
establishment, in India and overseas. The Bank launched its credit card in
association with VISA in November 2001. The Bank is also one of the
leading players in the “merchant acquiring” business with over 25,000
Point-of-sale (POS) terminals for debit/credit cards acceptance at
merchant establishments. The Bank is well positioned as a leader in
various net-based B2C opportunities including a wide range of internet
banking service for Fixed Deposits, Loans, Bill Payments, etc.

c) Treasury Operations
Within this business, the bank has three man product areas –
Foreign Exchange and Derivatives, Local Currency Money Market &
Debt Securities, and Equities. With the liberalization of the financial
markets in India, corporate need more sophisticated risk management
information, advice and product structures. These and fine pricing on
various treasury products are provided through the bank’s Treasury team.

To comply with statutory reserve requirements, the bank is
required to hold 25% of its deposits in government securities. The


TERMINALS AT HDFC

Treasury business is responsible for managing the returns and market risk
on this investment portfolio.

RATING

HDFC Bank has its deposit schemes rated by two rating agencies – Credit
Analysis & Research Limited (CARE) and Fitch Ratings India Private
Limited. The Bank’s Fixed Deposit programme has been rated ‘CARE AAA
(FD)’ [Triple A] by CARE, which represents instruments considered to be “of
the best quality, carrying negligible investment risk”. CARE has also rated the
Bank’s Certificate of Deposit (CD) programme “PR 1+” which represents
“superior capacity for repayment of short term promissory obligations”. Fitch
Ratings India Pvt. Ltd. (100% subsidiary of Fitch Inc.) has assigned the
“tAAA (ind)” rating to the Bank’s deposit programme, with the outlook on the
rating as “stable”. This rating indicates “highest credit quality” where
“protection factors very high”. In each case referred to above, the ratings
awarded were the highest assigned by the rating agency for those instruments.

CORPORATE GOVERNANCE RATING
The bank was one of the first four companies which subjected itself to a
Corporate Governance and Value Creation (GVC) rating by the rating agency,
The Credit Rating Information Services of India Limited (CRISIL). The rating
provides an independent assessment of an entity’s current performance and an
expectation on its “balance value creation and corporate governance practices” in
future.

The bank has been assigned a ‘CRISIL GVC Level 1’ rating which
indicates that the bank’s capability with respect to wealth creation for all its
stakeholders while adopting sound corporate governance practices is the highest.


TERMINALS AT HDFC

PRODUCT RANGE
Saving, Fixed Deposits, Current and Demat Accounts

Saving Account : Apart from the usual facilities, you get a free
ATM Card, Inter branch banking, Net Banking, Bill Pay, Phone Banking, Debit
Card and Mobile Banking, among others.

HDFC Bank Preferred : A preferential Savings Account where you
are assigned a dedicated Relationship Manager, who is your one-point contact.
You also get privileges like fee waiver, enhanced ATM withdrawal limit, priority
locker allotment, free Demat Account and lower interest rate on loans, to name a
few.

Sweep-in Account : A fixed deposit linked to your Saving Account. So,
even if you’re Savings Account runs a bit short, you can cheque (or use your
ATM Card). The money is automatically swept in from your in from your fixed
deposit into your Savings Account.

Super Saver Account : Gives you an overdraft facility up to 75% of
your Fixed Deposit. In an emergency, you can access your funds while your Fixed
Deposit continues to earn high interest.

HDFC Bank Plus : Apart for Regular and Premium Current accounts
we also have HDFC Bank Plus, a Current Account and then some more. You can
transfer up to Rs. 50 lakh per month at no extra charge, between the four metros.
Your can also avail of cheque clearing between the four metros, get cash


TERMINALS AT HDFC

delivery/pickup up to Rs. 25,000/-, home delivery of Demand Drafts, at-par
cheques, outstation cheque clearance facility, etc.

Demand Account : Conduct hassle-free transactions on your shares.
You can also access your Demat Account on the Internet.

Innovative Services for your convenience...

Phone Banking : 24-hour automated banking services with 39
Phone Banking numbers available.

ATM 24-hour Banking: Apart from routine transactions, you can also pay
your utility bills and transfer funds, at any of our ATMs across the country all
year round.

Inter-city/inter branch banking : Access your account from any of our
289 branches in 151 cities.

Net Banking : Access your bank account from anywhere in the
world, at anytime, at your own convenience. Your can also view your Demat
Account through Net Banking.
Mobile Banking : An ATM card your can shop with all over
the country and in over 140 countries with. You can spend in any currency, and
pay in Rupees.

Mobile Banking : Access your account on your mobile
phone screen at no airtime cost. Use SMS technology to conduct your banking
transactions from your cell phone.


TERMINALS AT HDFC

Bill Pay : Pay your telephone, electricity and
mobile phone bills through our ATMs, Internet, phone or mobile phone. No more
standing in long queues or writing cheques.

Loans for every need
Now, loans come to you in easy-to-pay monthly installments, and are
available with easy documentation and quick delivery. With e-instant loans, you
can even apply for loans on the Net and approval in just 60 seconds.

Personal Loans : Take a loan of up to Rs. 3 lakh for a wedding,
education, purchase of computer or an exciting holiday.

New Car Loans and Used Car Loans: Finance up to 90% of the cost of a
car, new or used! And the loans come to you with easy documentation and speedy
processing at attractive interest rates.
Loans against Shares : Get an overdraft up to Rs. 10 lakh at an attractive
interest’s rate against physical shares, up to 50% of the market value of your
shares. In case of Demat Shares, you can get Loans against Shares of up to 65%
of the market value of your shares, till Rs. 20 lakh.

Two Wheeler and Consumer Loans: To help you buy the best durables for
your home.

Demat Account : Protect your shares from damage, loss and
theft, by maintaining your shares in electronic form. You can also access your
demat account on the internet.


TERMINALS AT HDFC

Current Account : Get a personalized cheque book, monthly
account statements, interbranch banking and much more.

Mutual Funds : Apart from a wide choice of mutual funds to suit
your individual needs, you benefit from expert advice on choosing the right funds
based on in-depth market analysis.

International Credit Card: Get an option of Silver, Gold, or Health plus Credit
card, accepted worldwide from a world-class bank. If you have outstanding
balance on your other credit cared, you can transfer that balance to this card at a
lower interest rate.
NRI Services : A comprehensive range, backed by unmatched
features and world-class service, ensures NRIs all the banking support they need.

Forex Facilities : Avail of foreign currency, travelers cheques,
foreign exchange demand drafts, to meet your travel needs.

Insurance* : HDFC Bank now brings your life insurance and Pension Solutions
like Risk Cover Scheme, Saving Scheme, children’s Plan and Personal Plan from
HDFC Standard Life Insurance Co. Ltd.


TERMINALS AT HDFC

Awards and Achievements – Banking Services
HDFC Bank began operation in 1995 with a simple mission: to be a
“World-class Indian Bank”.

We realized that only a single-minded focus on product quality and
service excellence would help us get there. Today, we are proud to say that we are
well on our way towards that goal.

It is extremely gratifying that our efforts towards providing customer
convenience have been recognized both nationally and internationally.

In the year 2000, leading financial magazine Forbes Global named us in
its list of “The 300 Best Small Companies” in the world and as one of the “20 for
2001” best small companies in the world.

In 2003, Forbes Global again named us in its ranking of “Best Under a
Billion, 200 Best Small Companies for 2003”.

London-based Euro money magazine gave us the award for “Best Bank
India” in 1999, “Best Domestic Bank” in India in 2000, and “Best Bank in
Indian” in 2001 and 2002.


TERMINALS AT HDFC

Hong Kong-based Finance Asia magazine rated us “Best Domestic
Commercial Bank in India” in 1999, 2000 and 2001 respectively and “Best Local
Bank in India” in 2002.

Asia money magazine has named us “Best of Commercial Bank in India
2002”.

The Economic Times has conferred on us The Economic Times Awards
for Corporate Excellence as the Emerging Company of the Year 2000-01.

Another leading Indian business magazine Business Today in a survey
rated us “Best Private Sector Bank” in India in 1999 and “Best Bank in India” in
2003.

For our use of information technology we have been recognized as a
“Computer world Honors Laureate” and awarded the 21st Century Achievement
Award in 2002 for Finance, Insurance & Real Estate category by Computer
world, Inc., USA. Our technology initiative has been included as a case study in
their online global archives.

NASSCOM and economictimes.com have named us the “Best IT User in
Banking” at the IT Users Awards 2003.

HDFC Bank has been named Best Domestic Bank in India Region in The
Asset Triple a Country Awards 2003.

We are aware that all these awards are mere milestones in the continuing,
never-ending journey of providing excellent service to our customers. We are
confident, however, that with your feedback and support, we will be able to
maintain and improve our services.


TERMINALS AT HDFC

PRODUCT PROFILE

Today is an era of smart money, or plastic money. The very concept of
currency notes are getting changed day-by-day as more and more people are
going for credit and debit cards.

Nowadays life being to fast that people don’t want to stand in the queue of
conventional banks which have taken at least a half hour or so. Apart from the
people don’t want to carry cash to increases the thickness of their wallet for all
these reasons concept of smart money or plastic money have come to picture in
the form of various credit and debit cards. Moreover a carry 2-3 card in wallet is
seen as al status symbol in the society.

For your every need you have credit card which can buy each and every
thing. Your think of it you can buy it from your credit card. Starting from a pack
of salt from the departmental store to complex software from the vendor you can
buy everything from your credit card. But how this system actually works? How
can you buy a thing just by a swipe of plastic card?


TERMINALS AT HDFC

Answer is through EDC machines (electronic data capture), which the
merchant or the shopkeeper should have if he accepts credit cards. These
machines are connected by the normal telephone lines to the banks server, which
have a database of the cardholder.

From this database it checks whether a particular person is eligible to
purchases that thing. If yes, it sends the approval to EDC terminal installed at
merchant shop. All this happens in couple of seconds. Then the purchases cycle
get over by just a swipe of a card. And the amount immediately gets credited in
merchants account in the bank automatically. Demand of EDC terminals are
increasing day by day as sizable population is having credit or debit cads. So
merchants don’t have any option but to have a EDC terminal in his hop. It has
been proved from this study that there has been increase of business in the shop
after installing the EDC terminal. Because now they have added credit / debit
cardholder’s in their customer list.

With the advantage of aggressive advertising consumers are provided to
buy things. Or you may get some urgency to buy something It may be possible
that one may not be having cash all the time for such problem there is a solution
in the form of credit or debit cards. Now to make such purchase happen or if you
want your customer to buy more you have to accept credit card for that EDC
terminal is must.

Gone are the days when the perception of services remained confined to
work with only service motto, without charging any fee or without accepting any
obligation. The time cycle, coiling more dynamism in its nature, necessitates a
change in perception as willy-nilly, we do not venture to go against the wild. The
mechanized system of development paves ways for socio-economic transaction,
which makes possible an increase in the level of disposable income. When we
earn more, we like to spend more. We take interest in utilizing our leisure time or


TERMINALS AT HDFC

availing the modern amenities and facilities. The imbalance in demographic
structure complicates the task of policy makers, especially in terms of creating
and expanding the job opportunities.

OPERATIONAL DEFINITION
1. EDC Machine:-
Electronic data capture machine which is used in transaction
involving credit cards and debit cards.

2. Swipe:-
Swipe is the touch of a debit card/credit card basically to the EDC
machine, cards have a magnetic stripe at the back of it which contain all
the information about the card holder. So the movement a card is swiped
in the EDC terminals all information about the cardholder goes to bank
server.

3. Approval:-
Approval is given by the bank whether a card holder is eligible for
a credit card or not. Once a card has been swiped the entire data goes to
bank server and it checks whether the cardholder is eligible for the credit


TERMINALS AT HDFC

card. It send approval immediately to the EDC terminal in which card has
been swiped.

4. Batch settlement:-
Batch settlement is done at the day end of the business. All the
transaction of the day of each terminal is recorded in the bank server. At
the day end when the merchant does the batch settlement on his EDC
terminal whatever amount of transaction he did on the gets credited to his
current account.

HDFC Bank’s Merchant Establishment Operation
HDFC Bank presents the most powerful Merchant Services programme
that enables Merchant Establishment to accept both Credit and Debit card
payments in the most efficient manner.

HDFC Bank understands business needs and has tailor-made offering to
facilitate smooth running of business. Credit and Debit cards have become the
most preferred mode of payment by customers at Merchant Establishment.
Merchant Services programme enables to accept all major Credit and Debit cards
issued in India and abroad.

HDFC’s full range of Merchant Services programme comprises of a
Merchant Current Account, EDC terminals to facilitate online acceptance of
Current Account, EDC terminals to facilitate online acceptance of Credit and
Debit cards and electronic settlement of card transactions. Trained relationship
staff to take care of day-to-day requirements supports all this.


TERMINALS AT HDFC

WIDEST RANGE OF CARDS ACCEPTED
As HDFC’s Merchant establishment, merchant can accept VISA, Master
Card, VISA Electron, Master Card Electronic cards. Merchants can also accept
American Express Cards on the terminals providing by HDFC Bank.

Electronic Processing
HDFC Bank provides state-of-the-art, latest generation EDC terminals that
handle authorization and settlement of transaction. This assists Merchant in
processing card transaction in the most efficient and secure manner, at
establishment. HDFC has thereby eliminated the need for cumbersome and time
consuming manual authorizations as well as preparation of paper charge slip that
result in delayed or missing payment.

Quick Payment
Payment for all settled Merchant transaction are made on the next business
day, and are electronically credited in Merchant Current Account with HDFC
Bank. This ensures that your funds are available to Merchant as early as possible
for your business needs.

Pricing Options
HDFC’s pricing options are customized to suit Merchant’s Business
needs. The services are priced to suit the scale and size of every business. HDFC
also offer terminals under a monthly rental scheme to extend services to smaller
establishments as well.

National Coverage
In case business is spread over multiple cities in India, HDFC provide
tailor-made solution to cater to merchants national requirement.


TERMINALS AT HDFC

Merchant Current Account Options
With HDFC’s Current Accounts, there are less delays and hassles in
handling payments for cards accepted by merchant. Unlike cheque payments,
HDFC provide a totally electronic settlement solution. Wherein payments for
settled card transactions are credited automatically in the merchant’s current
account with HDFC Bank. Merchant can also access Merchant Current Account
using HDFC’s Free Phone Banking and Free Net Banking services. There is
multiple Merchant Current Account option.

HDFC Bank Merchant Plus
Single account, multi-city banking
If merchants business regularly requires receiving and sending funds to
various cities in the country, HDFC Bank Merchant Plus Account provides your
with the means to facilitate such transaction efficiently. With just one account
Merchants have access to more than 85 cities in the country. In other words, the
power of a single account and multi-city banking. This results in huge saving on
intercity movement of funds and other service charges. The average balance
requirement for the HDFC Bank Merchant Plus account is Rs. 50,000 per quarter.

Exclusive benefits for the HDFC Bank Merchant Account holders
• Free at-Par cheque facility
• Free funds transfer
• Free Pay-Order/Demand Draft payable on HDFC Bank locations.
• Free online, real time Net Banking
• Huge savings on Bank charges.
• Cash pick-up (available in selected cities) and Demand Draft delivery at a
nominal cost.
• Free Debit Card for sole proprietors.


TERMINALS AT HDFC

Regular Merchant Current Account
The regular Merchant Current Account offers you trouble-free banking
with a very reasonable average quarterly balance requirement of Rs. 10,000 only.
Besides, HDFC will give a Free-International Debit Card (only for sole
proprietors).

HDFC also offer a zero Balance Merchant Current Account for merchant
payments. However, branch transaction like cash deposit, cash withdrawal etc. is
not permitted under this Merchant Current Account.

Facilitation of payments through Credit and Debit cards
Electronic processing:-
HDFC Bank provides Electronic terminals for processing card transaction.

Online, Real time:-
All transaction are confirmed with Issuing Banks online, real-time before
handling over of goods/services.

Quick Settlements:-
HDFC Bank pays for the transaction the next business by morning.

MIS Reports:-
HDFC Bank provides two levels of MIS reports for easy reconciliation

Product Features
All Visa/Master Card/American Express Credit Cards (subject to the
agreement signed with AMEX bank) and all Visa Electron/Maestro Debit Cards.


TERMINALS AT HDFC

Latest State-of-Art EDC terminal including the first mobile EDC
Personalized service by Bank staff.

Payment options – Credit to Account or Cheque (only to very large
relationships)

Competitive pricing including Rental option for EDCs

Three Current Account Options
Zero Balance Current Account
Merchant Plus Account
All Regular Current, Trade and Plus accounts can be linked to the
Merchant A/c.

Free Debit Cards
Daily Cash Deposit limit of Rs. 25,000
Free Cheque Book

Merchant Plus Account
Free Debit Card
Enhanced Cash Pick-up limit of Rs. 1 Lac per day
Free Multi city cheque Book
Record maintenance by Merchant
A copy of Charge slips by Cardholders for a period of one year Copies of
Bills for which the cardholders is being charged.


TERMINALS AT HDFC

Set-up/Infrastructure
• Operations Centralized at Chandivalli
• Merchant Relationship Officers front-ending the Sales Relationship
• Merchant Helpdesk operational
• EDC Terminals installed and maintained by the Bank
• Back-end systems owned and operated by the Bank
ALL transactions of a day are paid for the next business day morning

Card Brand Accepted
All Credit and Debit Cards issued by Banks in India and abroad under any
of the following brands can be accepted on EDC terminals provided by HDFC
Bank:
- Visa
- Master Card
- Visa Electron
- Maestro
- Master Card Electronic
- American Express (Terminal sharing arrangement)

Process for Merchant
- HDFC Bank shall provided EDC terminals at Merchant outlet
- Merchant to provide shall be completed by swiping the customer cards
on the EDC terminals
- Swiping the customer cards on the EDC terminals shall complete all
Cards transactions.
- At the end-of-the day, a Settlement function is performed on the EDC.
All transition
- Upon successful completion of settlement, the EDC terminal provides
a detail


TERMINALS AT HDFC

Summary report
- HDFC Bank shall credit Merchant’s Account with the net proceeds on
the next business day morning
- HDFC Bank shall also provide a detailed MIS report for the
Settlements from each location/EDC terminal for merchants with of
Rs. 1 Lac and above

Target Merchant Categories
• Petrol Pumps
• Retailers – Apparels, Departmental Stores, Book stores, Music stores
etc.
• Restaurants
• Hotels
• Consumer durables dealers
• Computer dealer
• Travel Agents – IATA

Negative Merchant Categories
• Jewelers (Non Citi/HSBC)
• Travel Agents – non IATA
• Carpet Merchants
• Curios/Handicrafts catering to Foreign Tourists

Competitors

Main Competitors:
CITI BANK
Default choice, Blanket pricing, poor Relationship and highhanded
approach. Only other acquirer to accept PIN based cards


TERMINALS AT HDFC

HSBC
Very strong Relationship based offering, Amex terminal sharing is the
main advantage, Present at high-end Merchants and all Hotels, Key to success is
Amex terminal sharing.

ICICI
Fast emerging as a key player in Z cat and Citi strongholds.
Other key players:

BOB Cards
Low-end Merchants, no ownership of terminals and infrastructure. Poor
service delivery, pricing above ‘normal’.

IDBI, Bank of India and other Public Sector Banks

BACKGROUND OF THE PROBLEM

The survey was conducted to find the perception of customers about EDC
terminals and to design promotion strategies for HDFC’s EDC terminals
Bangalore market. This is about sales promotion of HDFC’S EDC machine in
Bangalore market. This survey is for potential customers. This includes the
comprehensive market survey and studying the dynamics of the market in terms
of perception. And it also includes the analysis of the information gathered and
implementation of sales strategies and techniques devised by the team.


TERMINALS AT HDFC

The study was conducted to analyze the merchant requirements and service
related issue concerned with the EDC (Electronic Data Capture) machine and then
proceed to sales.

Tools such as questionnaires, telephonic interviews were used in identifying the
requirements and structured interviews were used to proceed further.

STATEMENT OF PROBLEM

Today is an era of smart money or plastic money. The very concept of currency
notes are getting changed day-by-day as more and more people are going for
credit and debit cards. People do not prefer to carry cash that increases the
thickness of their wallet and concept of smart money or plastic. Money has come
into picture in the form of various credit cards. To carry 2-3 cards in wallet is seen
as status of symbol in the society.

Merchant Establishment: - This department started its operations in Bangalore
in the year 2002. The complete department deals with only one product and that is
“The EDC (Electronic Data Capture) machine” because HDFC Bank found a
need to enter the market of EDC machine in Bangalore as the silicon City was
having a very high potential for merchants who were in need of this machine and


TERMINALS AT HDFC

were was less awareness about this particular product. Though there are more
than around 15 players in this market its main competitors are CITI, ICICI, and
HSBC. It’s gained the late mover advantage by giving additional services and
establishing stronger relationship with the merchant.

The study aims at deriving information about non customers of HDFC and the
willingness level among those customers to change to HDFC’S EDC machine.

NEED AND IMPORTANCE OF THE STUDY

Presence of a large number of players especially in the banking sector has
ensured stiff competition in the industry. Competition is based on technology,
benefits given, and services provided and more importantly price. Key to success
is therefore value additional in the service but at affordable prices.


TERMINALS AT HDFC

.
The survey intends to gain knowledge of the non customers in the
Bangalore market and determine the pulse of the market regarding the acceptance
of the EDC terminal, and to know the satisfaction level also. The bank can extend
its added services to customers and draw attention towards the additional benefits
the merchant would be entitled to if he would implement the banks EDC machine

OBJECTIVE OF THE STUDY

1. To know the perception of the customer about EDC terminals.

2. To find out the Brand Equity among the EDC Terminal providers.
.
3. To suggest creative ways for promoting and penetrating the Market.

4. To create knowledge about the EDC terminals provided by HDFC.


TERMINALS AT HDFC

LIMITATIONS
1. The collected data is confined only into the boundaries of Bangalore market.

2. Sometimes respondents may provide false information.

3. Questionnaire survey and personal interviews are the main techniques used in
this study, which are wholly based on the perception of the respondents at the
time of answering.

4. Time and resources are also limiting factors of the study.

METHODOLOGY
• Well-structured questionnaire comprising both open-ended and closed
questions were designed for the respondent.
• A pilot survey was conducted to ensure the accuracy of the designed
questionnaire
• The necessary changes were made in the questionnaire and the actual survey
was conducted after the approval from the project guide.
• Personal interviews were conducted as per the convenience of the respondents
and also keeping the time –constraint.
• Collection of data from customers


TERMINALS AT HDFC

1. The primary data from the respondents is obtained through
structured questionnaire as well as telephonic interviews administering
questionnaires as per the convenience of the respondents.
2. This data was collected from the records existing in the bank,
company website & through internet.

TYPE OF RESEARCH
The research work is of descriptive type. A research design is purely and
simply the frame work or plans for a study that guides the collection and analysis
of data.

The information is collected from the 200 merchants having EDC machine
(Non HDFC) in their firms. The information regarding the role of factors
affecting sales promotion and their present EDC services.


TERMINALS AT HDFC

RESEARCH DESIGN

SAMPLE UNIT : Merchants and Businessmen having EDC terminals (Non
HDFC).

SAMPLE SIZE : The sample size taken for the study was 200

SAMPLING TECHNIQUE : In this study convenience sampling method was
used to draw the sample size of 200 merchants having EDC machine
(Non HDFC) in their shops.

ACTUAL COLLECTION OF DATA
Data was collected from both primary and secondary source.

PRIMARY DATA
The interviewer approached the respondents, and a structured
questionnaire was given to the respondents with a request to answer the questions
and return the questionnaire.

SECONDARY DATA


TERMINALS AT HDFC

Data was also collected from the records existing in the bank.

TECHNIQUE FOR ANALYSIS
Data collected through questionnaire has been analyzed using simple
percentage analysis. Based on the analysis conclusions and suggestion have been
drawn.

SAMPLE DESCRIPTION
For this project, mainly considering EDC machine using shop, this
including Petrol pumps, Retail-Apparels, Departmental store, Book stores, Music
stores etc., Restaurants & Hotel etc.,

Field Work
This study was made from April 2005 to May 2005during this period the
following days were distributed as below.
- Six days for pilot study.
- Seven days with dissuasion with Organization Guide
- Seven days for preparing questionnaire
- Twenty days collection of primary data.
- Twenty days for the revised primary data collected and discussion with
faculty guide.

Findings
1. According to you EDC terminals are convenient for:

Finding
Opinion No. of Respondents Percentage
Convenient for Customers 42 21
Convenient for business 8 4
Both 150 75
Total 200 100


TERMINALS AT HDFC

21%
4% Convenient for Customers
Convenient for business
Both
75%

It can be concluded from the above table that 75% of the respondents had
opinion that EDC facility was convenient for both business and the customers,
21% of the respondents feels that EDC facility was convenient for customer, 4%
of respondents feels that it was convenient for business.


TERMINALS AT HDFC

2. Are you Aware of HDFC’s EDC terminal & service?

Findings
Opinion
Yes No. of Respondents
180 Percentage
90
NoYes 20194 10 97
No
Total 200 6 100 3
Total 200 100

The above table shows that, out of respondents, 97% of them were aware
about the EDC services providing by HDFC and 3% of them of them were not
aware about the service.
3%

97 %

3. Are you Aware of HDFC’s tie-up with American Express on
terminal sharing?

Finding


TERMINALS AT HDFC

10 %

YES
NO

90 %

The above table shows that,90% of the respondents were aware of
HDFC’s tie-up with American express on EDC terminal sharing,10% of the
respondents were not aware of tie-up with American express Bank.


TERMINALS AT HDFC

4. Rank the following in order of Brand equity among
EDC service?
(1 for highest Brand equity and 5 for lowest Brand equity)

Opinion Points Rank
CITI Bank 862 1
ICICI Bank 823 2
HDFC Bank 782 3
HSBC Bank 292 4
STAN-C 241 5
Findings

1000

800
600
400
200

0
CITI ICICI HDFC HSBC STAN-
C


TERMINALS AT HDFC

The above table shows that, in terms of brand equity CITI Bank got first
rank among EDC service providing banks, ICICI Bank got second rank, HDFC
Bank got third rank, HSBC and STAN-C bank got fourth and fifth rank
respectively.

5. What are the rates charged by the present terminal you use?

Findings
Rates No. of Respondents Percentage
< 1.85% 120 60
1.85%- 2% 74 37
> 2% 6 3
Total 200 100

60
50
40
30
20
10
0
<1.85% 1.85% - 2% >2%

The above graph shows that 60% of the sample is charged less than
1.85%, 37% is charged between 1.85% - 2% and only 3% are charged more than
2%.


TERMINALS AT HDFC

Yes 160 80
No. 40 20
Total 200 100

6. Are you satisfied with present rates charged?

Findings

20 %

YES
NO

80 %

The above table reveals that, 80% of the respondents were satisfied with
present rates. 20% of the respondents were not satisfied with present rates


TERMINALS AT HDFC

7. What was the most important factor for selecting the
present bank’s EDC Terminal you use?
Pricing 122 61
Service 46 23
Approached First 16 8
Relationship with the 14 7
bank
Other 2 1
Total 200 100

Finding

70
61
60
50
40
30 23
20
8 7
10
1
0
Pricing Service ApproachedRelationship Other
First with the
bank


TERMINALS AT HDFC

The above table shows that, 61% of the respondent had opinion that
pricing offered was the factor for selecting the present bank’s terminal, 23% of
Average turnover(Rs.) No. of Respondents Percentage
<25000 20 10
25000 - 50000 60 30
50000-100000 28 14
100000 - 200000 18 9
200000 - 500000 44 22
500000 - 1000000 24 12

>1000000 6 3

TOTAL 200 100

the respondent agreed that service provided was the factor, 8% of respondents
gave respect to the first approach made by bank, 7% of respondents agree respect
for their earlier relationship with the bank, 1% of the respondents assess other
factors.

8. What is your Average monthly card turnover?

Findings

35%
30%
25%
20%
15%
10%
5%
0%
00
0

0
00
0

00
25

20

50
-5

10
-1

10
<

0-

0-
25

0-
50

>
10

20

50


TERMINALS AT HDFC

It can be concluded from the above table, 10% of the

respondents agree that they have turnover of less than

Rs.25,000 per month, 30say between Rs. 25,000-50,000, 14%

say between Rs.50,000- 1,00,000, 18% say between

Rs.1,00,000- 2,00,000, 22% say between Rs2,00,000-5,00,000,

12% say between Rs. 5,00,000-10,00,000 and only 3% of the

respondents say above Rs.10,00,000.

9. How do you rate the response on redressal of
complaints by the present terminal provider ?

Findings


TERMINALS AT HDFC

Very Fast 56 28
Fast 140 70
Slow 4 2
Very Slow 0 0
Total 200 100

70%
60%
50%
40%
30%
20%
10%
0%
VERY FAST SLOW VERY
FAST SLOW

It can be concluded from the above table that, 29% of the respondents
agreed that the redressal of complaint was fast, 70% of the respondents agreed the
redressal of complaint was very fast, 2% of the respondent opined that the
redressal of complaint was slow, 0% of the respondent opined that the redressal of
complaints was very slow.


TERMINALS AT HDFC

10. Is the EDC machine regularly serviced by the provider?

Yes 180 90
No. 20 10
Total 200 100
Findings

10 %

YES
NO

90 %

The above table reveals that, 90% of the respondents agree that their
machine being serviced regularly. 10% of the respondents did not agree in this
regard.


TERMINALS AT HDFC

11. Does your relationship officer visit you regularly?

Yes 190 95
No. 10 5
Total 200 100
Findings

100%

80%
60%
40%

20%
0%
YES NO

The above table reveals that 95%of the respondents agreed that their
relationship officer were approached regularly, 5% of the respondent did not
agree in this regard.


TERMINALS AT HDFC

12. Are you satisfied with the present service provided by the
EDC Terminal provider?

Yes 150 75
No. 50 25
Total 200 100
Findings

25%

YES
NO

75%

The above table reveals that, 75% of the respondents were satisfied with
present service. 25% of the respondents were not satisfied with present service.


TERMINALS AT HDFC

13. Has a HDFC sales person approached you before?

Yes 192 96
No. 8 4
Total 200 100
Findings

100%
80%
60%
40%

20%
0%
YES NO

The above table reveals that 96%of the respondents agreed

that HDFC salesperson approached before, 4% of the

respondent did not agree in this regard.


TERMINALS AT HDFC

14. Would you buy a HDFC EDC Terminal if you get lower
rates?
Findings

Yes 120 60
No. 80 40
Total 200 100

60%
50%
40%
30%
20%
10%
0%
YES NO


TERMINALS AT HDFC

The above table reveals that 60%of the respondents agreed to change to
HDFC, 40% of the respondent did not agree in this regard.

15. Would you buy a HDFC EDC Terminal if you get more value
added services?

Findings

80%

60%

40%

20%

0%
YES NO


TERMINALS AT HDFC

The above table reveals that 65%of the respondents agreed to
change to HDFC, 35% of the respondent did not agree in this regard.

Yes 130 65
No. 70 35
Total 200 100

16. Would you buy a HDFC EDC Terminal if bank branch is near
to you?

Findings
Yes 110 55
No. 90 45
Total 200 100

60%
50%
40%
30%
20%
10%
0%
YES NO


TERMINALS AT HDFC

HDFC, 45% of the respondent did not agree in this regard

17. Would you buy a HDFC EDC Terminal if documentation
procedure is easier ?
Findings

Yes 114 57
No. 86 43
Total 200 100


TERMINALS AT HDFC

60%
50%
40%
30%
20%
10%
0%
YES NO

HDFC, 43% of the respondent did not agree in this regard.

FINDINGS

1. 75 % of the sample said that they were satisfied with their present EDC
terminal provider.
2. 75% of the sample opinioned that EDC machines were convenient for both
customers and business.
3. 97% of the sample was aware of HDFC providing the EDC terminal.
4. 90 % of the sample said that they were aware of HDFC’s tie up with
American Express card in the terminal.
5. In terms of brand equity Citibank (862 pts) was ranked first, followed by
ICICI (823) and HDFC (782).


TERMINALS AT HDFC

6. 90 % sample opinioned that their machines were being serviced regularly.
7. HDFC’s sales person had approached 96 % of respondents earlier for
an EDC terminal.
8. 60 % of the sample said that they would switsh to a HDFC terminal if lower
rates were charged.
9. 61 % of the respondents said that pricing was the most important factor for
selecting an EDC terminal, followed by service level( 23 %).
10. 55 % of the respondents opinioned that nearness of the bank was
an important factor in selecting the terminal.
11. 57 % of the respondents said that they would go in for a HDFC terminal
easier documentation.
12. Most opinioned those merchant services promptly attended to their
complaints (Very Fast 28%, Fast 70%, Slow 2%, Very Slow 0%).
13. 65 % of the respondents said that they would go in for a HDFC terminal if
more value added services were provided.

SUGGESTIONS

The Market for EDC Terminals is highly competitive with many large
established players. Promoting the sales of EDC terminals and penetrating the
markets in such competitive situations is a challenging task. 75 % of the
respondents of the said that they are satisfied with their present EDC terminal
providers, this makes the promotion and penetration of HDFC EDC terminals into
the market even more difficult.


TERMINALS AT HDFC

The findings however reveal a few important points, which would help
promote the HDFC terminals. The suggestions are as follows.

1. Provide more value added services as 65 % of the respondents said that
they would go in for a HDFC terminal if more value added services were
provided.
2. HDFC should charge lower rates than its main competitors in order to
promote sales as 60 % of the sample said that they would purchase a
HDFC terminal if lower rates were charged.
3. HDFC should keep its documentation procedure simple.
4. HDFC should try and solve its customers complaints as fast as possible as
most of the respondents rated their present terminal providers as “fast” in
attending to their complaints. HDFC can promise to solve its customers
complaints within some time frame.
5. As 96 % of the respondents said that a HDFC sales person had earlier
visited them for a EDC terminal connection, HDFC must take into
consideration the findings and suggestions of this project and develop new
promotion strategy before approaching the potential customers.
6. HDFC must concentrate on providing better service than its competitors
and make sure that HDFC’s relationship officers visit the customers
frequently so that it doesn’t lose its customers to its competitors.

CONCLUSION
Merchant service sector has become extremely complex. Today’s
customers demand more and more facilities from their bank. Most merchants
were aware about the facilities provided by the bank. In this era of cutthroat


TERMINALS AT HDFC

competition, banks have to focus on customer care and in attracting new
customers.

This project helps in studying the EDC service providers in Bangalore
market, and determining customer’s willingness to change to HDFC. The
project also aimed at ascertaining the competition level in the EDC machine
segment.

To conclude CITI enjoys the most number of customers in this
category followed by ICICI,HDFC AND HSBC behind in the queue.

Finally we conclude by determining the most of the merchant
anticipated greater returns from the bank in the form of higher discount, greater
benefit and better service.

IMPLICATION


TERMINALS AT HDFC

This study gives relevant information to the company to adopt the best
promotional strategy, to know about the players in market and their marketing
strategy. It helps the company to know more about the present status of
market and how to target the audience, how to promote sales, how to fix the
rates charging to satisfy customers. This study is helpful for the company to
know the nook-n-corner of market. It gives information about needs and wants
of the customers, reasons for their acceptance, and desired rate charging.

BIBLIOGRAPHY


TERMINALS AT HDFC

BOOKS
1. Tull & Hawkins “Marketing Research”.
2. Donald R. Cooper & Pramela S. Schindler “Research Methodology” 1999,
Tata Mc Graw Hill
3. Philip Kotler “Marketing Management” 1999, Prentice Hall of India Pvt.
Ltd.
4. Valeri Ziethamal
Services Marketing
Tata Mc Graw Hill
5. Company Journals

Website- www.hdfcbank.com

Questionnaire

Name of the Firm :

Name of the customer :

Address :

Current Terminal :

Date :

Phone Number :

1. According to you EDC terminals are convenient for:
(A) Convenient for Customers
(B) Convenient for business


TERMINALS AT HDFC

(C) Both
2. Are you Aware of HDFC’s EDC terminal & service?
(A) Yes
(B) No
3. Are you Aware of HDFC’s tie-up with American Express on
terminal
sharing?
(A) Yes
(B) No
4. Rank the following in order of Brand equity among EDC
service?
(1 for highest Brand equity and 5 for lowest Brand equity)
(A) CITI Bank
(B) ICICI Bank
(C) HDFC Bank
(D) HSBC Bank
(E) STAN-C
5. What are the rates charged by the present terminal you use?
(A) < 1.85%
(B) 1.85%- 2%
(C) > 2%
6. Are you satisfied with present rates charged?
(A) Yes
(B) No

7. What was the most important factor for selecting the
present bank’s EDC
Terminal you use?
(A) Pricing
(B) Service
(C) Approached First
(D) Relationship with the bank
(E) Other
8. What is your Average monthly card turnover (in Rs.)?
(A) <25000 (B) 25000 – 50000 (C) 50000-
100000
(D) 100000 – 200000 (E) 200000 – 500000 (F) 500000 –
1000000


TERMINALS AT HDFC

(G) >1000000
9. How do you rate the response on redressal of complaints
by the present
terminal provider ?
(A) Very Fast
(B) Fast
(C) Slow
(D) Very Slow.
10. Is the EDC machine regularly serviced by the provider?
(A) Yes
(B) No
11. Does your relationship officer visit you regularly?
(A) Yes
(B) No
12. Are you satisfied with the present service provided by the
EDC Terminal
provider?
(A) Yes
(B) No
13. Has a HDFC sales person approached you before?
(A) Yes
(B) No
14. Would you buy a HDFC EDC Terminal if you get lower rates?
(A) Yes
(B) No

15. Would you buy a HDFC EDC Terminal if you get more value
added
services?
(A) Yes
(B) No
16. Would you buy a HDFC EDC Terminal if bank branch is near
to you?
(A) Yes
(B) No
17. Would you buy a HDFC EDC Terminal if documentation
procedure is
easier ?
a. Yes
b. No


TERMINALS AT HDFC


A project report on the perception of the customer about edc terminals at hdfc

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