• RuPay- Indian own card payment network

    RuPay is a domestic plastic card scheme launched by the National Payments Corporation of India (NPCI) for using within India. This scheme was launched with the aim to fulfill the Reserve Bank of India’s desire to have India’s own domestic and multilateral payments payment system just like VISA or Mastercard. RuPay facilitates electronic payment at all Indian banks, ATMs and financial institutions which makes it one of the most popular domestic payment system now.

    NPCI (National Payments Corporation of India) is a body promoted by RBI and currently has ten core promoter banks which are State Bank of India, Punjab National Bank, Canara Bank, ICICI Bank, HDFC Bank Bank of Baroda, Union bank of India, Bank of India, Citibank and HSBC. It has launched RuPay card payment network in 2012 with the aim of creating India’s own domestic payment network and enable all Indian banks and financial institutions in India to participate in electronic payments.

    Currently more than 145,000 ATMs and more than 875,000 point of sale (PoS) terminals are accepting RuPay cards, as per data published by the National Payments Corporation of India. The next aim of National Payments Corporation of India to offer RuPay Credit Cards from July 2016.

    Advantages of RuPay Cards:

    • Cost Reduction: Currently Indian Banks pay close to USD USD 100 million annually to major networks (Visa, MasterCard) for all domestic transactions. Rupay scheme is expected to provide very low cost of clearing and settlement due to its no profit objectives.
    • Higher security for domestic banks: As Rupay is a domestic payment network, all critical and crucial transaction details will remain inside the country.
    • Financial inclusion plan: Due to lower transaction cost and own domestic network, Co-operative, Rural Banks and small retail stores, merchants will be able to join the card payment system which will lead to better financial inclusion in the country. Government’s aim is to provide debit card to each farmers in the country using this network system.

    Challenges:

    • Being a small player today compared to other international players like VISA and Mastercard, RuPay needs to build its brand value and customer loyalty in order to gain market share.
    • Card payment industry needs huge technical infrastructure and secure arrangements to make the process efficient and secure. Rupay has to keep pace with competitors to develop modern communication networks and create fraud prevention techniques.

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