Wednesday, August 26, 2015

India's RuPay breaks Visa and MasterCard's grip

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Hiding behind Prime Minister Narendra Modi’s high-decibel financial inclusion push is a rather unnoticed growth story: RuPay, India’s own payment gateway.
About 190 million, or one in three of the total 580 million debit cards currently in use in India are RuPay cards.
Clearly, the Pradhan Mantri Jan Dhan Yojana (PMJDY) have given a head-start to a one-year-old card system that now stands almost shoulder-to-shoulder with global peers such as Visa and MasterCard in India, at least in user volume. And it has its own advantages (see graphic).
Modi launched the Jan Dhan scheme in August last year, with the promise to end “financial untouchability”.
So far, more than 175 million accounts, which come with a RuPay debit card and an overdraft facility of Rs 5,000, have been opened under the scheme.
Already 154 million RuPay cards have been issued to these new non-frills account holders. Banks have also issued another 40 million RuPay debit cards to “non-Jan Dhan” customers.
“We are now focussing outside the PMJDY and promoting these RuPay cards even to other savings account holders,” AP Hota, MD and CEO, National Payments Corporation of India (NPCI), which runs RuPay, told HT. “Until one year ago MasterCard and Visa Card were predominant in the market while now RuPay has made a mark and we are hoping to increase its presence further.”
MasterCard said Indians are fast adopting digital payment technologies. “There is plenty of room to grow in this segment,” said Vikas Varma, executive director, South Asia, MasterCard.

“Low personal consumption expenditure penetration presents a significant opportunity for electronic payments growth, in line with the government’s less- cash society vision,” said TR Ramachandran, group country manager, India and South Asia, Visa.
NPCI’s nine promoter banks include State Bank of India, Punjab National Bank, Canara Bank, Bank of Baroda, Union Bank of India, ICICI Bank, HDFC Bank, Citibank and HSBC.
For RuPay, which the RBI first conceptualised in a vision paper in 2009, making it more acceptable in retail merchandise and e-commerce transactions, and globally remain key challenges.
China has a similar card called the Union Pay of China.
Indian Railway Catering and Tourism Corporation (IRCTC), billed as India’s biggest e-commerce site, has launched a RuPay pre-paid card that allows railway passengers to book tickets, shop and pay service bills.
NPCI has tied up with Discover Financial Services and Japanese card network JCB for international acceptance of its cards.

RuPay card to soon overtake Visa-Master cards in India?

  RuPay card to soon overtake Visa-Master cards in India?

RuPay, the foster child of Pradhan Mantri Jan Dhan Yojana (PMDJY), is the new payment getaway card in India breaking the long grip of Visa and Master in the card market. And it only looks to increase over the years.

It is interesting to note that, of the 580 million debit cards used in India, 190 million are said to be RuPay card, a huge achievement for a year old card.

The Jan Dhan Yojana, which was launched by Prime Minister Narendra Modi in August 2014, has over 175 million accounts (17.5 crore) as of August 2015.

While 154 million RuPay cards have been issued to the account holders under the PMJDY, banks are also said to have issued 40 million RuPay debit cards to 'non-jan-dhan' accounts.

Having grown so mcuh within a year, the RuPay card is said to have broken the grip of the Visa-Master grip of the card market.

“Untill one year ago MasterCard and Visa Card were predominant in the market while now RuPay has made a mark and we are hoping to increase its presence further”, AP Hota, MD and CEO, National Payments Corporation of India (NPCI) which runs RuPay to Hindustan Times.

The NPCI is likely to launch RuPay credit cards by March next year, as per report in HT.

Moreover, NPCI is also said to have tied up with Discover Financial Services and Japanese card network JCB for international acceptance of the RuPay cards.

With the increasing credibility and importance of the card, the Indian Railway Catering and Tourism Corporation (IRTCT) has also launched a RuPay pre-paid card which allows passengers to book tickets, pay service bills or shop.

Now, Shop with IRCTC RuPay Card

Now, Shop with IRCTC RuPay Card

Now passengers can do shopping by using the IRCTC RuPay prepaid card as Indian Railway Catering and Tourism Corporation has expanded its range of service.

IRCTC Union Bank Prepaid Card was launched in collaboration with the Union Bank of India and the National Payment Corporation of India in May.

Till now, the card was used only for rail bookings.

The services are now being extended to allow payment at merchant locations like restaurants, malls and also for online shopping as we have got the necessary permission for expansion of the service, IRCTC chairman and managing director A K Manocha said.

The card allows for easy transactions on the railway booking website, with the first five transactions each month offered free of transaction charges, and an attractive rewards point system on every transaction.

"The IRCTC Union Bank Prepaid Card has already notched up 7,000 users since its launch, and the number of prospective users is showing an upward trend," Mr Manocha said.

A PSU of the Railway Ministry, IRCTC had recently tied up with Amazon, a leading e-commerce company, to offer its customers the online shopping opportunities in addition to its regular travel ticket booking and hotel accommodation booking services.

"The IRCTC Union Bank Prepaid Card will further expand the online shopping preferences of our patrons, besides online rail ticketing," Mr Manocha said.

Friday, August 7, 2015

NPCI ties up with JCBI to issue RuPay card in India




Japan’s JCB International and National Payments Council of India (NPCI) have entered into a strategic partnership for JCB Acceptance and Card Issuing in India.

NPCI provides RuPay, a domestic card payment network countering Visa and MasterCard.
The agreement, which will initially enable the JCBI cardholders to transit in all ATMs and credit card swipe machines in India, will eventually enable the Indian issuers to come out with cards that can be accepted globally without going through the visa or MasterCard network.

In the first stage of the agreement between the JCBI and NPCI, over 10 lakh card-accepting terminals and 2,00,000 ATMs across India will be made available to the JCBI cardholders.

Around 165 million RuPay domestic cards have been issued by 426 banks in India.

“The visitors from Japan are many and the economic relationship is emerging and growing. Since we have built the massive infrastructure with the cooperation of the banks, the network must be of privilege. We would like to support the member banks so that their infrastructure will be utilized to the maximum,” said A.P. Hota, Managing Director and CEO, NPCI.

India is a growing economy and JCB considers it to become one of the world’s leading consumer markets.

The debit and credit cardholders in the country are also growing steadily.

“We believe our extensive card acceptance network and customer oriented services across the world will be a strong feature of RuPay/JCB international cards. We would love to by-implant important product in promoting RuPay cards throughout the world and contribute to the NPCI member banks by providing unique and expensive values of JCB Brand,” said Kimihisa Imada, Deputy President, JCB International Co.

Japan is also finding new partners in the manufacturing sector.

Yamaha showcased the newly developed linear conveyor module for manufacturing line at a recently held Manufacturing World Japan expo.

Comparing to conventional conveyor, the linear conveyor can freely manipulate a slider on which the products are moved. It achieves more advanced convey.

“This is already used in factories across Asia, including in Thailand and China. It is suitable for large-scale production like manufacturing mobile phones,” said Nagashima Ryuzo, Sales Office Manager, Yamaha Motor Co. Ltd.

Suga Systems Inc. showcased a 3D printer called “LOGSITE”, a suitable product for business or educational purpose. The printer is equipped with special heater for quicker production.

“I have been involved in making 3D printers from the beginning of this industry. With that knowledge, we especially want to put focus on educational industry like introducing this machine to schools and raise the level of Japanese manufacturing industry,” said Tokuzo Suga, a representative of Suga Systems Inc.

The Japanese companies are fast expanding their base by joining hands with local companies throughout Asia. It not only helps the Japanese firms to grow, but also helps them in introducing advanced technology to their partner firms in the Asian subcontinent.

Friday, June 12, 2015

Banking on the RuPay

The recent Jan Dhan Yojna has given RuPay a big boost as every account-holder is getting the RuPay card.

 

NPCI had brought to life RuPay debit cards in 2012.

It was recently revealed by the National Payment Corporation of India (NPCI), a government agency, that RuPay-branded credit cards would be launched in less than 10 months from now. Lalatendu Mishra and S. Varadharajan have this explainer on RuPay: 

What is RuPay?
RuPay is India’s own card payment scheme. Like all other card payment schemes, notably Visa and MasterCard, it was created to ensure cashless transactions. The scheme was conceived by NPCI, an initiative of the Reserve Bank of India and an umbrella institution for all retail payment systems in the country. 

Why the name RuPay?
RuPay is a play of the words rupee and payment. It was originally called IndiaPay. 

So, you can do with RuPay what you can do with other cards?
Yes, you can use them at ATMs, as well as while shopping both online and offline. 

How does any card system work?
Imagine you are paying for your grocery purchases at a supermarket using your card. When your card is swiped, the seller’s bank submits the transaction through a card payment network (the likes of Visa or RuPay) to the bank that issued your card in the first place. The card payment network forms the middle layer connecting the card issuing bank and the seller’s merchant bank. 

When there are other such systems already, why one more in the form of RuPay?
RBI wants to back a domestic card system with a few goals. One, provide affordable electronic transactions for local banks. Two, promote financial inclusion. The idea of a domestic card is to break the dominance of international majors such as Visa and MasterCard.
The website of NPCI also lists as a benefit the fact that transaction and customer data of RuPay users will stay in India. 

Where are RuPay cards accepted?
They are accepted at more than one million points of sale terminals. Over 20,000 online merchants accept RuPay cards. Internationally, RuPay cards can be used at all Discover & Diner PoS and ATM networks. 

How affordable are RuPay cards for banks?
Banks pay higher transaction fee in case of foreign cards such as Visa and MasterCard. Since the transaction processing of RuPay happens domestically, it leads to lower cost for clearing and settlement of transactions. According to NPCI officials, the cost is around one-third of the fee charged by foreign card brands. 

How much does NPCI charge for use of RuPay?
For use at ATMs, banks are charged 45 paise per transaction and 90 paise per transaction at point-of-sale in merchant establishments or e-commerce platforms, irrespective of the transaction value. Other card systems charge more in case of high value transactions. 

What is RuPay's market share in India?
According to information in the Finance Ministry’s website, around 14 crore RuPay cards have been issued till date. Out of the 50 crore debit cards and two crore credit cards in circulation, this works out to about 27 per cent. And, this number has been achieved in less than three years. Out of the 14 crore cards issued, 55 per cent are active, according to Finance Ministry data. The recent Jan Dhan Yojna has given RuPay a big boost as every account-holder is getting the RuPay card. The direct benefits transfer scheme has also helped in making the RuPay cards active.

‘55% of RuPay cards active under Jan Dhan Yojna’

 AP HOTA, MD and CEO of NPCI

Exploring the feasibility of networking with China, says NPCI chief

As India’s own card-payment scheme RuPay aims to go global, National Payments Corporation of India (NPCI), which conceived and launched the scheme, has tied up with Chinese and Japanese companies to help citizens of these countries use Indian ATMs and Point-of-Sale terminals. AP Hota, Managing Director and CEO of NPCI, says the corporation plans to take this one-way relationship further and bring more activity into the home-grown card network. Edited excerpts from an interview:

How will the tie-up with China UnionPay International be beneficial?
We are exploring the feasibility of network-to-network relationship with China. Initially, the relationship will be one-way, that is, China’s UnionPay card-holder when they come to India can use Indian PoS terminals and ATMs. Currently, all the ATMs and 99 per cent of PoS terminals are part of NPCI.
Next, we will look at commercial arrangements between NPCI and China Union. They will have their approval and we will now seek approval from our member-banks and we can expect this in the next two months.
Later, the technical integration will be done and, in anticipation, we have already started the process. We may look at going the other way later — that is, our card-holders can use ATMs and PoS terminals in China.

What is the status on cards under Jan Dhan Yojna? How many are active?
Over 130 million cards (13.7 crore according to the Pradhan Mantri Jan Dhan Yojna website) have been dispatched as on April-end. According to Finance Ministry data, 55 per cent of the 140 million cards issued under Jan Dhan are active, though previously it was 70 per cent. However, we are hopeful that once MNREGA is implemented, the level of inactive accounts will come down. Direct Benefits Transfer (DBT) has also helped in making them active.

The RBI has said it will roll out guidelines for issuing mobility cards. When will they be launched?
We are working with the Ministry of Transport to make payments easier in smart cities by issuing mobility cards. We have built the specifications based on both national and international standards.
This will facilitate usage of the cards at grocery shops or while buying tickets for any mode of transport through the contact-less system.
Also, the requirement of contact-less transactions will be huge and procuring large terminals in accordance with Indian standards will also serve the ‘Make in India’ campaign. We have made several presentations and the Ministry is examining our specifications. 

Will you be using the same debit cards?
Yes, it will have to be EMV (Europay, MasterCard, and Visa) enabled and have NFC (near field communication) technology. From September onwards, we will have to issue EMV-based cards as per RBI mandate.
It will be a challenge to replace the existing Jan Dhan Yojna cards into EMV-enabled ones. As of now, the RBI has not given any deadline on the replacement.

Jan Dhan rolls on, but ‘dhan’ in accounts slow to accrue




About 47 per cent of bank accounts opened under the Pradhan Mantri Jan-Dhan Yojana in Karnataka have zero balance

Banks in Karnataka have gone about creating no-frills accounts under the Pradhan Mantri Jan-Dhan Yojana (PMJDY) with great zeal and created close to 72 lakh accounts since August 15, 2014. The difficult task, however, has been ensuring transactions through the accounts, with nearly half of them categorised as ‘zero-balance’ accounts as of now.
Massive drive

Statistics accessed through SyndicateBank, Karnataka’s nodal bank for the scheme, shows that banks in Karnataka created 71.68 lakh accounts under the PMJDY between August 15, 2014 and May 23, 2015. Of them, 33.88 lakh are zero-balance accounts, which translates to 47.27 per cent.
K. Preetam Lal, General Manager of SyndicateBank, said population in the State yet to have bank account was “less than one per cent”, which includes migrant workers and people in very remote areas. He said the banks had not insisted on opening with a balance in the first phase, but the next target was making them operational, which they hope to achieve by the year-end.
A micro reading of the zero-balance accounts across districts under this much-talked-about financial inclusion mission throws up some interesting patterns. Predictably, many districts with over 50 per cent zero-balance accounts lie in north Karnataka, with Bagalkot (61.19 per cent), Haveri (60.64 per cent), Koppal (57.95 per cent), Vijayapura (56.64 per cent) and Ballari (56.42 per cent) among the toppers.
The contrast

However, it is Bengaluru Rural district that has the maximum number of zero-balance accounts (81.15 per cent). In contrast, Bengaluru Urban district has the least number of zero-balance accounts, at 29.87 per cent.
OD, but only with Aadhaar
People opening the PMJDY account are entitled to overdraft (OD) facility, but conditions apply. The account-holder should have “satisfactory” transaction for six months and he/she should be the head of the family. Another important condition is that he/she should mandatorily have an Aadhaar card, which is important for “reasons of regulation”. As of now, of the 71.68 lakh accounts, 41.25 lakh are Aadhaar-seeded accounts.
Reluctance for RuPay card
A PMJDY card holder is entitled to a RuPay debit card, but a substantial number of those who are entitled for the cards do not appear to be interested in taking them. As per the records, though 63.79 lakh debit cards have been issued, banks have reported that about 20 per cent of them have not been collected by beneficiaries.
* Total number of PMJDY accounts in State: 71,68,528
* Total number of accounts with zero balance: 33,88,737
* Total number of Aadhaar-seeded accounts: 41,25,839
* Total balance in accounts: Rs. 641.93 crore
* RuPay debit cards issued: 63,79,177