Indian RuPay card answer to Visa/Master Card?

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  • RuPay is a combination of two words – Rupee and Payment. RuPay Card is an Indian version of credit/debit card. It is very similar to international cards such as Visa/Master.
  • Government has instructed  state owned banks to issue RuPay debit cards to their customers. This looks like a clear indication to promote these cards
  • National Payments Corporation of India (NPCI) initiated the launch of RuPay card in India. It was done with the intention of integration of payment systems in the country. It has also tied up with Discover Financial Services firm for promoting this.
  • It was created to fulfil the Reserve Bank of India’s desire to have a domestic, open loop, and multilateral system of payments in India. RuPay facilitates electronic payment at all Indian banks and financial institutions, and competes with MasterCard and Visa in India.
  • NPCI maintains ties with Discover Financial to enable the card scheme to gain international acceptance.

How does RuPay Card works?

  • RuPay debit cards are similar any other debit cards that you might hold now.
  • The card can be accessed in the 1.45 lakh ATMs and 8.75 lakh POS terminals across the country. It will also be accepted on 10,000 e-commerce websites. All major public sector banks, including SBI, have started issuing these cards to all their customers.
  • The card also comes with a high end technology chip named EMV (Europay, Master Card and Visa) especially for high end transactions. It also has an embedded micro processor circuit with information about the card holder.

How is it different from Master/Visa Card?

  • The first major difference is the RuPay is India’s own domestic card with its own payment gateway.
  • Since every transaction through RuPay will take place within India, the banks will have to pay less service charge to the payment gateway as compared to Visa, MasterCard and others. For e.g. If a person does a transaction of say Rs. 2,000 then banks will have to pay around  Rs.. 2.50 when RuPay is used whereas for the same transaction amount, Visa or Mastercard will charge Rs. 3.25.
  • Technically , transactions done through international cards is processed in foreign country which involves higher charge which helps in generating profit for Visa/MasterCard whereas RuPay transactions would happen domestically so charge would be less.
  • It is a domestic product with less transaction costs compared to visa debit card which has processing in foreign countries.
  • In case of international cards banks have to pay entry fee to be a part of their network which is not the case with RuPay card i.e. no joining fee for the banks.

Other Features of RuPay Card

  • RuPay also provides a unified “Kisan Card”, issued by banks across the country under Kisan Credit Card, enabling farmers to transact business on ATMs and PoS terminals.
  • RuPay cards got a major boost through the Pradhan Mantri Jan Dhan Yojana as RuPay cards were issued to all Jan Dhan accounts. In spite of the critics saying most accounts are dormant, RuPay cards are now widely used by Jan Dhan Card holders.
  • PUNGRAIN (Punjab Grains Procurement Corporation Ltd), pays commission agents through the RuPay Debit Card, and developed a commission agents network called the Kisan Arhtia Information and Remittance Online Network (KAIRON) with the help of the National Payments Corporation of India.
  • Kotak Mahindra Bank in partnership with RuPay rolled out an initiative for financial inclusion, where the dairy farmers across 75 cooperative societies of AMUL in regions of Burdwan and Hooghly of West Bengal will be able to get their payments directly into their account on the same day of sale of milk.
  • The same model is planned to be adopted in the state of Gujarat where 1200 cooperative societies comprising over 300,000 dairy farmers will be the part of the programme.
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