What is RuPay? RuPay Review

1. About RuPay Card

The RuPay card scheme was conceived and launched by the National Payments Corporation of India on March 26, 2012. Its goal is to build a domestic, open and multilateral payment system.

RuPay provides electronic payment services to all Indian banks and financial institutions. In India, 90% of credit card transactions and almost all debit card transactions are domestic. However, foreign cards dominate, so transaction costs are high.

In 2009, the Reserve Bank of India asked the Indian Banks Association to create a non-profit payment solutions company that would design a unique payment card that would offer state-of-the-art technology. The technology would be secure, powerful, scalable, simple and cost-effective to meet the requirements of open, multilateral domestic payments. The card was tentatively called India Pay. After years of planning, the National Payments Corporation of India has finalized the name of the proposed card as Rupay.

As of July 2018, RuPay cards are issued nationwide to savings and current account holders of more than 1,100 banks in India. Apart from major private sector and public sector banks, RuPay cards are also issued by cooperative banks (Scheduled Cooperative Banks, Regional Cooperative Banks, State Cooperative Banks, Urban Cooperative Banks) and Regional Rural Banks of India.

Union Bank of India launched RuPay Combo Debit Cum Credit Card in November 2018. The card has 2 EMV and 2 magnetic stripes and debit and credit card transactions are made based on which side of the card is inserted or swiped.

RuPay, the seven-year-old card system competes with global payment network companies like MasterCard and Visa. The card is broadly available in five versions. One such variant , the RuPay contactless card, serves as the national universal mobile card that allows users to pay for bus and metro fares, besides paying tolls and parking charges. It can be used both at ATMs and online.

Why did RuPay gain prominence?

The idea behind designing RuPay is to promote the use of electronic payments as well as to expand the concept of financial inclusion. The Prime Minister’s flagship scheme for financial inclusion, Jan Dhan Yojana, has boosted the payment scheme as its debit cards are issued to every account opened under the scheme in order to provide affordable basic banking services. It has come close to grabbing nearly 60% of the market share in terms of card issuance. Moreover, RuPay is cheaper and more affordable compared to foreign company cards like Mastercard and Visa as its transactions are processed domestically.

3. What are statistics?

There were 60.76 million RuPay transactions worth ₹8,723 crore at POS terminals in June, up from 71.18 million transactions in the previous week, up ₹60.79 crore a year ago. The value and volume of transactions rose 65% and 51% respectively in FY19.

4. What are the limitations of RuPay?

RuPay card has very limited international presence even though it is tied up with global payment networks like Discover, Diners Club International, PULSE etc. to help customers make international purchases and withdraw cash outside India. People who travel abroad tend to prefer Visa, MasterCard and American Express as they have built higher acceptance and comfort over the years. Typical card users are still reluctant to use RuPay due to factors like lack of awareness and brand appeal.

5. How to promote RuPay?

The Centre and RBI have been working towards promoting digital transactions. NPCI, banks and the Centre will expand and deepen the use of RuPay globally to enhance its brand value, according to the RBI's vision, for the next three years. To facilitate remittances into India and help Indian travellers make payments overseas, the Nandan Nilekani-led expert panel on digital payments recommended that NPCI prepare an internationalisation plan for Indian payment systems such as RuPay and BHIM Unified Payments Interface.