Reliance Infocomm is offering to host bank servers in its data centres and connect them to end-users (branches), either through its fibre network or through a local multiple distribution system. It is also offering its wireless network to banks so that they can set up point of sale terminals in remote locations.

A point of sale terminal is the desktop machine that reads a card and obtains authorisation from the user's bank.

Reliance Infocomm is talking to HDFC Bank, ICICI Bank, Bank of Punjab, State Bank of India and Venture Infotek to offer its wireless network for credit or debit cards and automated teller machines.

"We are not only offering wireless network for cards and ATM connectivity, but also back-end connectivity through our fibre network or a microwave technology called local multiple distribution system, to reach places where our fibre network is not present. The microwave technology has connected almost 50 cities across the country," a source close to the development said.

The source explained that the tie-up between Reliance Infocomm and banks could lead to a surge in card use, and allow banks to set up ATMs in places where leased-line connectivity was not available.

Currently, shopkeepers process credit or debit card payments by swiping them at point of sale terminals, which connect to banks' network access controllers through a public switched telecom network connection.

The network access controller directs the information contained in a credit or ATM card to the bank's data centre.

The new wireless network of Reliance will directly connect to a bank's data centre by skipping the PSTN connection and the network access controller. Banks will be able to cut costs because they will not have to set up network access controllers in different cities. Shopkeepers will also save on costs as they will not have to make long-distance calls to connect with the nearest network access controller of a bank.

The point of sale terminal will be connected to a Reliance IndiaMobile phone. Shopkeepers will, therefore, be able to carry these terminals to customers' doorsteps and accept card payments.