Card Scheme: RuPay versus the International Networks
- The National Payments Corporation of India (NPCI) carries on developing RuPay, the Indian “Not for profit” payment system designed to rival large international networks including Visa, MasterCard and American Express.
- The new debit cards (to be used at over 91,000 ATMs and in 600,000 Indian stores) will first be proposed to Union Bank of India and Bank of India customers. The NPCI has also finalised an agreement with Discover to allow for international acceptance.
- Its first official acquiring banks include Axis Bank, Bank of Baroda, Corporation Bank and the State Bank of India. According to the NPCI several other institutions are currently testing the system and the major Indian banks should have been integrated within six months. Smaller institutions used to be unable to afford joining the main schemes (“due to high cost of initial participation fee and quarterly minimum processing fees”) but could now participate in RuPay.
- The domestic scheme aims to reach 50% market share by 2015 and should then start proposing credit cards too.
Source: RuPay card News
- RuPay focused on limiting card fees and proposes a 40% lower interchange than its rivals.
- A calendar has also been set up to create a low-cost online payment scheme to back the national project heading towards a cashless society, through a partnership with the Unique Identification Authority of India on the issuance of prepaid cards for social benefits.
- RuPay (formerly IndiaPay) has been founded by the RBI starting 2005, and represents a less expensive alternative than the international card schemes. RuPay cards have been under deployment since June 2011, and were initially designed to favour banking inclusion (starting in semi-rural areas) – see June 2011 Insight.