MUMBAI: The country’s largest lender State Bank of India SBI ) has said in a research report that banks stand to lose Rs 3,800 crore annually due to the investment in card-swipe machines as costs outstrip revenues.As of July, banks had a network of 28.4 lakh card-swipe machines — almost double the 15.1 lakh in existence before demonetisation. SBI, which had 3.4 lakh machines in October 2016 before demonetisation, increased this to 6.13 lakh by July this year.The key reason behind the loss is that average monthly transactions in a point of sale (PoS) terminal continues to be around 150 per month, while the transaction charges on debit cards have been reduced sharply.“In order to encourage card payments, the government has been pushing banks to install more number of point of sale machines and banks are installing on an average 5,000 PoS a day. But the transactions at PoS are increasing at a much slower pace,” said the SBI report. It added that if transactions do not gain momentum, this would raise the question of viability of the business for acquiring banks. Acquiring banks are those who install the card-swipe machines as against the ‘issuing banks’ — a term used to describe card issuers.According to the report, the acquiring bank loses money in ‘off-us’ transactions — a term used to describe those payments where the card-issuing bank is different from the bank that has installed the PoS machine . According to SBI, the loss is very high on a credit card transaction, where the acquiring bank has to pay a large chunk to the credit card-issuing bank. The only transactions where the acquiring bank makes money are the ‘on-us’ transactions, or the ones where the acquiring bank and the card-issuing bank are the same.“Though the government has proposed various measures to incentivise the PoS infrastructure and banks are installing PoS terminals, in the long-run the business would be viable only if the transactions at PoS surpass ATM transactions — an enviable task indeed,” the report said.