Tag: rupay

The National Payments Corporation of India’s (NPCI) brainchild, RuPay is a native card payments network initiated by the Reserve Bank of India (RBI). It is a financial services and payment services system launched in 2012 and dedicated to the country in 2014. A fusion between ‘rupee’ and ‘payment’ inspired its name along with the intent to bring India into the global payments market via its indigenous card facility.

Why was RuPay launched?

The proposition of a cashless India was enhanced with the introduction of the RuPay cards. Building a cashless economy requires financial inclusion and RuPay reached rural India and boosted digital payments with the Pradhan Mantri Jan Dhan Yojana scheme. Under PMJDY, 258 million RuPay debit cards were issued in 2020 alone from public sector banks under the Indian government’s financial plan. From 15% in 2017 to over 60% in 2020, RuPay’s Indian market share has accelerated.

Moreover, with no domestic payments network, banks were forced to pay high affiliation charges to multinationals like Mastercard and Visa for trusted associations. Hence, NPCI was created as a non-profit payments company to construct an affordable and accessible payments network for Indians.

Where are RuPay cards accepted?

They are accepted at all ATMs, by POS machines in India, and for domestic online and offline shopping. They aren’t accepted internationally except at those ATMs, POS machines and e-commerce websites where ‘Discover Financial Service’ (DFS) and ‘Diner’ is enabled. Presently, cards under RuPay Global are accepted at over 42.4 million POS locations and over 1.90 million ATM locations in over 185 countries.

Why a RuPay card?

Being a domestic framework, banks issuing RuPay cards are at an advantage as they are not required to pay network registration fees unlike in the case of a Visa or MasterCard registration. With a zero merchant discount rate (MDR), banks have also agreed to charge nothing on UPI and RuPay card transactions. This has made RuPay transactions preferable while also stimulating FinTechs to innovate and provide better payment products to customers because of the ease of UPI and RuPay payments framework.

It also has a greater reach in rural areas. Under the PMJDY scheme, free RuPay debit cards were given to all bank account holders. As all processing of transactions happens in the country, there is also a lower settlement cost.

RuPay has both debit and credit cards for individuals, corporates, and prepaid cards; there’s a ‘Kisan Credit Card’ available as well. There’s also a ‘contactless’ card that facilitates transactions on a single tap, making payments without disclosing crucial card details.

What does RuPay’s future look like?

With a recent ban on new issuances by MasterCard, RuPay has an opportunistic freeway to capture the credit and debit card market in India. As of November 2020, around 603.6 million RuPay cards have been issued by nearly 1,158 banks.

Banks are also pushing towards a higher RuPay card issuance after FM Nirmala Sitharaman said, “RuPay card will have to be the only card you promote. Whoever needs a card, RuPay will be the only card you would promote and I would not think it is necessary today in India when RuPay is becoming global, for Indians to be given any other card first than RuPay itself,” at the 73rd annual general meeting of the Indian Banks’ Association (IBA) last year.

Even in the credit space, Visa and MasterCard have made themselves comfortable at the top with huge amounts of credit card transactions happening via POS machines. RuPay can conquer the card space.