Executive Summary – RuPay, a payment gateway system devised in India by NCPI is an alternative to international payment systems like MasterCard and Visa. It provides payment services that are local and therefore faster and cost effective.There are RuPay cards like RuPay debit cards, RuPay IRCTC card, RuPay Global Cards that can be used by customers in ATMs, PoS outlets and online transactions. RuPay credit cards are going to be launched soon.
Download PDF
What is RuPay?
RuPay is a domestic scheme payment gateway system in India. It has been ideated and launched by the National Payments Corporation of India (NPCI). It is an alternative to the existing payment gateways like MasterCard and Visa. It is a payment system to facilitate electronic transactions.
Moreover RuPay cards can be used at ATMs, many merchant establishments in India and for online shopping. Most major public sector banks issue RuPay cards.
RuPay is a domestic scheme payment gateway system in India. It has been ideated and launched by the National Payments Corporation of India (NPCI). It is an alternative to the existing payment gateways like MasterCard and Visa. It is a payment system to facilitate electronic transactions.
Moreover RuPay cards can be used at ATMs, many merchant establishments in India and for online shopping. Most major public sector banks issue RuPay cards.
RuPay, the Indian payment system is a cost effective and faster alternative to others such as MasterCard and Visa for banks and consumers in India. RuPay cards can also be used in PoS outlets, ATMs and online stores.
How is RuPay beneficial to the banking system in India?
RuPay is a domestic payment system. When banks in India use it, the processing fees that they pay will be less as compared to fees that they have to pay MasterCard or Visa especially on international transactions. This reduces transaction costs for banks and they can pass on benefits to the customers. Banks have to pay quarterly fees for transactions done using MasterCard/Visa. NCPI says that quarterly fees are waived for RuPay. For e-commerce and PoS transactions, Visa and MasterCard charge fees depending on the transaction value, RuPay charges a fixed fee of 60 paisa to the issuing bank, and 30 paisa to the acquiring bank which is much more cost effective.
Customer and transactions data will stay in India for transactions done using RuPay, whereas Visa/MasterCard store this data in their data centres all over the world.
Under the recently launched Jan Dhan Scheme, every account holder would receive a RuPay debit card which means banks issuing RuPay debit cards will be able to reach a wider customer base.
Banks do not have to pay joining fees to be part of the RuPay network but need to pay for joining the Visa and MasterCard network.
RuPay is a domestic payment system. When banks in India use it, the processing fees that they pay will be less as compared to fees that they have to pay MasterCard or Visa especially on international transactions. This reduces transaction costs for banks and they can pass on benefits to the customers. Banks have to pay quarterly fees for transactions done using MasterCard/Visa. NCPI says that quarterly fees are waived for RuPay. For e-commerce and PoS transactions, Visa and MasterCard charge fees depending on the transaction value, RuPay charges a fixed fee of 60 paisa to the issuing bank, and 30 paisa to the acquiring bank which is much more cost effective.
Customer and transactions data will stay in India for transactions done using RuPay, whereas Visa/MasterCard store this data in their data centres all over the world.
Under the recently launched Jan Dhan Scheme, every account holder would receive a RuPay debit card which means banks issuing RuPay debit cards will be able to reach a wider customer base.
Banks do not have to pay joining fees to be part of the RuPay network but need to pay for joining the Visa and MasterCard network.
Why should I as an individual use RuPay or RuPay cards?
International transactions lead to higher transaction costs. Such costs can be reduced by using RuPay card since processing will be done within the country. Also, transactions will be faster.
RuPay card is offered by public sector, select private banks, rural banks and co-operative banks which means it reaches a wide population.
One unique feature of RuPay transactions is that ATM pin code and the secure code are the same. since RuPay manages both the ATM and e-commerce network. This feature is not offered by Visa or or MasterCard.
There are different types of RuPay cards –RuPay debit cards – These are offered by many banks. Here are a few examples –
International transactions lead to higher transaction costs. Such costs can be reduced by using RuPay card since processing will be done within the country. Also, transactions will be faster.
RuPay card is offered by public sector, select private banks, rural banks and co-operative banks which means it reaches a wide population.
One unique feature of RuPay transactions is that ATM pin code and the secure code are the same. since RuPay manages both the ATM and e-commerce network. This feature is not offered by Visa or or MasterCard.
There are different types of RuPay cards –RuPay debit cards – These are offered by many banks. Here are a few examples –
|
RuPay Card
|
Features
|
|
HDFC RuPay Premium Debit Card
|
|
|
Kotak RuPay Card
|
|
|
Canara Bank RuPay Card
|
|
RuPay Global cards – RuPay has tied up with companies like Discover Financial Services, Diners Club etc. so that RuPay cards can be accepted in POS outlets and ATM outlets outside of India too.
IRCTC RuPay prepaid card – NCPI, IRCTC and Union Bank have collaborated to launch a prepaid RuPay card that will cater to buying of railway tickets. In the first 6 months, there will be no transaction charge and then there will be a charge of Rs. 10 per transaction. It will have accident insurance to KYC compliant holders and provide reward points.
RuPay Credit Cards – There are reports that they will be launched soon.
IRCTC RuPay prepaid card – NCPI, IRCTC and Union Bank have collaborated to launch a prepaid RuPay card that will cater to buying of railway tickets. In the first 6 months, there will be no transaction charge and then there will be a charge of Rs. 10 per transaction. It will have accident insurance to KYC compliant holders and provide reward points.
RuPay Credit Cards – There are reports that they will be launched soon.
What are the disadvantages in using RuPay?
There are no reward points on RuPay cards.
There is not much clarity on details like re-issuance and annual fees etc.
Conclusion
RuPay cards have a market share of 38% in the debit cards market. Card Usage and online transactions are on the rise. Here is the share of RuPay transactions in the overall market –
RuPay cards have a market share of 38% in the debit cards market. Card Usage and online transactions are on the rise. Here is the share of RuPay transactions in the overall market –
Source: http://www.npci.org.in/documents/Banking_Update_RuPay_Driving_card_penetration_in_India.pdf
If the card usage growth is same and the government supports RuPay and the banks engage in merchant acquisition and set up of card infrastructure, RuPay payment system has the potential to become a huge success.
0 Comments