President Pranab Mukherjee dedicated to the nation on Thursday India’s own card payment network, RuPay, a system that is expected to be an alternative to global card payment networks such as Visa and MasterCard.
The system, developed by the National Payments Corporation of India, may soon be accepted internationally as the company is in advance talks with the US-based Discover (for transactions in western countries) and JCB of Japan for the East. This means, customers will soon be able to book train tickets using RuPay pre-paid cards or for shopping while travelling abroad.
“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,” Mukherjee said, adding that India was one of the few countries in the world to domestically meet the need for a card payment system. Currently, over 12 per cent of GDP worth cash and coins are in circulation, which is quite high.
RuPay, like any other debit card, works on three channels — ATMs, Points of Sale (POS) and online sales, besides Aadhaar-based micro ATMs.
So far, 31 scheduled commercial banks based in the public and private sector, 49 regional rural banks and 175 cooperatives have issued over two crore RuPay cards.Lower cost
The card is accepted at all the 1.6 lakh ATMs, 95 per cent of points of sale terminals (over 9.45 lakh) and most online merchants (about 10,000) in the country. All transactions under the RuPay card scheme are processed within the country and the transaction cost is reimbursed in domestic currency, which helps save foreign exchange.
Speaking on the occasion, Financial Services Secretary GS Sandhu said RuPay would be available at a much lower cost than international cards. For clearing and settlement of each transaction, banks will have to pay 40 per cent lower fees in the RuPay platform compared with international platforms.
Public sector banks have already installed 25,331 RuPay card-enabled ATMs and 9,000 more ATMs would be installed in the current fiscal, the senior official said.