Rupay Card (On Paper or Reality)

I am hearing about RuPay Card from long, but believe till today I don’t know its Reality or just Paper word. I am banking with around 6 Banks and these are India’s top most Banks (blend of Private and Nationalized). However, till today I have not received a single RuPay Debit Card neither any call from a Bank educating about the RuPay Card. This just shows how banks are working hand in glove with Giant Corporation to promote their International card e.g. Visa/ Master/Amex.

Why is that if you need a Rupay card it has to be requested? In fact, it has to be given as first priority to all new & existing customers.

Before we go in detail, I would like to explain to few of my readers who are not aware of Rupay card.

 President Pranab Mukherjee on 8 May 2014 dedicated to the nation RuPay, India’s own card payment network. The system has been developed by National Payment Corporation Ltd (NPCL). To make this system acceptable internationally, the company is in advance talks with Discover Financial Services of US for Western world and JCB of Japan for Eastern world.

 What is RuPay?

• RuPay is India’s own card payment network just like Visa and Master Card and provides an alternative system for banks to provide debit card service.
• It is 7th payment network in the world after Visa, MasterCard, American Express, Discover, Diners Club and JCB.
• RuPay, like any other debit card, works on three channels, ATMs, Point of Sales (PoS) and online sales beside Aadhaar-based micro ATM.
• With RuPay, India becomes one of the few countries in the world to meet domestically the need for card payment system.

  Lets Understand Why RuPay is beneficial to the country?

• All transactions under RuPay card scheme are processed within the country and the transaction cost is reimbursed in domestic currency which can save a lot of foreign currency.
• An indigenous system like RuPay will, hopefully, not only reduce the dependence on cash and cheque modes of settlement but will also make it easier to offer products based on specific requirements of diverse user sets within the country.

 Important Aspect Why Rupay is the need of the hour for India:

NPCI led by RBI launched Rupay with following objectives in minds

1. Lower cost and affordabilityReduction in cost of card or e-commerce transactions. Banks have to pay less to the payment gateway provider. Since the transaction processing will happen domestically, it would lead to lower cost of clearing and settlement for each transaction. This will make the transaction cost affordable and will drive usage of cards in the industry.  In FY10, according to RBI, domestic banks coughed out Rs 490 crore in interchange charges to Visa and MasterCard.
2. Data Security and Privacy: Data related to transactions and customers to reside in India for Rupay, whereas Visa/MasterCard stores this data in their data centers across the globe.
3. Customized product offering: RuPay, being a domestic scheme is committed towards development of customized product and service offerings for Indian consumers. RuPay Scheme provides flexibility to card issuing banks to issue special purpose cards like Kisan Cards, Milk Procurement Cards, Grain Procurement Cards and Financial Inclusion Cards. A variant of the card called Kisan Card is now being issued by all the Public Sector banks in addition to the mainstream debit card.
4. RuPay helps in financial inclusionas many co-operative banks and regional rural banks (RRBs) are included in its network.   A switchover to RuPay Card, the Indian version of Visa or MasterCard, can help domestic banks save as much Rs 300 crore annually in transaction fees. For all the stakeholders it makes immense business sense as NPCI charges just 90 paise as the fee per transaction — 60 paise from the merchant and 30 paise from the issuing bank — with the same kind of security; the same on a Visa or MasterCard is as high as Rs 4.

Conclusion: Make the Ecosystem favorable for Rupay

• All Nationalized and Private bank have to issue Debit card (mandatory) using Rupay as the Payment Network making others as Optional
• Rupay Credit card should be launched
• International tie-ups to promote Rupay