Wednesday, September 21, 2016

NPCI aims to corner 50% share of debit card market



 Digital payments in India are likely to create a $500 billion ecosystem by 2020, according to a report by BCG and Google released in July. Photo: Reuters

The National Payments Corporation of India (NPCI) is targeting a 50% market share in debit cards by 2018 through its RuPay network as it ties up with banks and more Indians get access to banking services.


The payment services provider is also planning to introduce new products such as an electronic toll-collection system, contactless tap-and-go cards and credit cards in the next three months to boost its share of consumer wallets.

“We are aiming for 320 million debit cards by March 2017. In a year after that, we will constitute about half of the total market,” said A.P. Hota, managing director and chief executive officer of NPCI.

At the end of July, the number of debit cards issued by Indian banks was 688.2 million. NPCI claims that 290 million, or 37%, use the RuPay card payment settlement system. The rest are serviced by Visa and Mastercard.

“When you include commercial banks and cooperative banks, there are about 1,600 banks in India. Of this, we have tied up with 700 banks already, which has helped us cover most banked customers,” Hota said.

On Monday, the company said that 46 new banks had joined its list of shareholders, taking the total to 56.

The number of debit cards issued in India has increased two-and-half times in the four years up to March 2016 with the introduction of the Jan-Dhan Yojana. However, at least 190 million cards issued under the scheme have seen very few transactions as the cardholders belonged to rural areas and lower income segments, according to a 11 March JM Financial Ltd report.

NPCI is also introducing three new products before the end of this calendar year. The first is an electronic toll-collection system likely to be launched by 31 October. This will be available across 395 toll collection plazas on national highways in its first phase. The toll plazas will have terminals that will verify vehicles on the basis of a device, which will automatically debit money from a prepaid account. State Bank of India, ICICI Bank, Axis Bank and IDFC Bank are on board to issue electronic toll-collection devices across toll plazas, said Hota.

NPCI officially launched the Unified Payments Interface (UPI) in April, allowing banks to develop applications in a way that will let customers to instantly transfer money to each other. This is widely expected to transform the payments business in India, as customers do not need to exchange bank account details to transfer money.

Another product is a contactless tap-and-go card which can be used to make small value payments, likely to be launched in November. NPCI is also looking to launch credit cards by December.
It has currently tied up with 10 banks and is looking to issue a minimum of 5 million cards initially, Hota said.

Discussions are currently on to finalize charges and other product details, he added, without disclosing the names of these banks as final agreements had not been signed.

“Digital payments are the future for us and NPCI has done quite a bit in improving the environment that supports it. It shouldn’t be longer than 18-30 months before we see explosive growth in these transactions,” said Alpesh Shah, senior partner and director at consulting firm BCG.

Digital payments in India are likely to create a $500 billion ecosystem by 2020, according to a report by BCG and Google released in July. Most of this would be due to better peer-to-peer transactions, the report had said.








Monday, July 11, 2016

RuPay credit card launch delayed further

RuPay credit card launch delayed further
RuPay, the domestic card payment service provider which was set to launch its credit card in June this year, has delayed the launch of its product. The earlier timeline for the launch was January, which was later pushed to June. However, now the National Payments Corporation of India (NPCI) has decided to shift the launch date even further.

“RuPay credit card was going to be launched in June 2016 but the launch has been further put off. The board approved date for the launch on August 28 but I think that will be a challenge. But, we will definitely launch the credit card in 2016,” said A P Hota, managing director and chief executive officer, NPCI.


Hota explained that the delay in launch is because NPCI is now working on a higher capacity financial technology infrastructure, which is taking time. “Currently, we have a switching system from Euronet. This has a capacity of 40 million transactions a day. However, the peak volume that we have processed is 14 million. But to be on a safe side, we have started work on a 100-million transaction capacity owned by FIS,” added Hota. The management believes it might take two-three years to reach the 100-million volume capacity mark.

Going ahead, within the credit card segment, NPCI will mainly be focusing on the top end segment, which is the gold or the platinum cards as they believe growth is likely to come from the higher-end variants.

RuPay is a domestic brand in the card space and is owned and developed by NPCI, and aims to compete with Visa and MasterCard that have a strong foothold in the segment. In the past year, RuPay has gained prominence as all the accounts started under the Pradhan Mantri Jan Dhan Yojana scheme have been given a RuPay card. According to the latest data, 219.3 million accounts have so far been opened and 180.1 million cards have been issued under this scheme.

Sunday, April 10, 2016

MasterCard CEO Ajay Banga calls for equal treatment with RuPay domestic card



MasterCard CEO Ajay Banga has called for equal treatment with the RuPay domestic card, particularly with regard to the government's flagship financial inclusion scheme on criteria such as security and cost advantages. "All I want is a level playing field," he said in an interview when asked about RuPay being used for the Pradhan Mantri Jan Dhan Yojana. "What I (MasterCard) can do is offer you global standards of safety and security. I don't believe any local instrument or scheme can..."
"I can bring all the expertise, manpower. You happen to have a CEO, an Indian by birth," Banga said. He said global investment sentiment on India had turned positive after the Narendra Modi government took over in 2014. "People today are talking India being a real opportunity," he said.
Much of this is because the government has sought to actively create an investor-friendly environment that eschews an aggressive tax policy, but the speed of reform needs to increase. "Retroactive taxation has single-handedly created the most angst in people's minds. So the biggest challenge is predictability and consistency of public policy," he said. "But now, while policy is clearer and more predictable, and frankly more transparent, the actual pace of implementation is choppy. The one thing we are keen on is increasing the pace of this implementation over four-five years."
What's needed is further clarity on taxes and intellectual property, besides market access. "India doesn't allow overseas law firms. It's all these ancillary services that enable an environment where investors feel comfortable to come in," he said. MasterCard has invested.`1,600 crore in India since Modi took over, he said.

RuPay, Indian payment company working on ‘contact-less’ debit card

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Domestic payment gateway RuPay, whose debit cards make up more than a third of the total number of debit cards in the country, is now working on a "contact-less" debit card...

Domestic payment gateway RuPay, whose debit cards make up more than a third of the total number of debit cards in the country, is now working on a “contact-less” debit card and is looking to launch it within three months, chief operating officer Dilip Asbe told FE.
“Contact-less” debit card will not be required to be dipped or inserted into a machine, and can instead be scanned by the machine without any physical contact whatsoever, unlike the debit and credit cards in play currently.
“We are very excited about this. Of course, we will have to issue fresh certifications to banks to enable them to start issuing these. But so far, we have received extremely positive feedback,” Asbe said.
Started by the National Payments Corporation of India (NPCI) in 2012, the number of RuPay cards is around 250 million, of the total of 644 million debit cards currently in use in India. This is primarily because of the Pradhan Mantri Jan Dhan Yojana, under which around 170 million RuPay cards were distributed.
NPCI has also issued around 2 million RuPay platinum cards so far. Unlike other gateways, all variants of the RuPay platinum card offer a waiver on fuel surcharge, IRCTC surcharge and free access to lounges across a wide network of airports around the globe. The product has been growing in popularity and will be one of the main focus points for the company going ahead, Asbe said.
The company is now looking forward to launching RuPay credit cards in September, and is aiming at gaining a share of around 10% of the domestic credit card market within the first three years.
As on December 31, the total number of credit cards in India stood at over 22.7 million, issued by 29 banks.

Sunday, March 13, 2016

NPCI To Launch RuPay Credit Card By July

NPCI to Launch RuPay Credit Card by July

The National Payments Corporation of India (NPCI) has said it will launch a RuPay credit card by June or July this year. "By June or July we will rollout RuPay version of credit cards," said NPCI chairman M. Balachandran on the margins of a Unified Payment Interface (UPI) hackathon the umbrella organisation for retail payments in the country organised.

He later said the NPCI has escalated its paid-up capital to Rs.137 crore from Rs. 100 crore by broad-basing its stakeholders from public and private sector banks as well.

As many as 56 different banks have shareholding in NPCI despite it being a non-listed entity with no dividend declarations.

"Ours is a non-profit company, and in spite of not being a listed entity and we don't declare dividends, the enthusiasm shown by people to become shareholders in NPCI has been tremendous," said Balachandran.

According to him, there are 241 million RuPay cards in circulation comprising 35 per cent of the total card base in India and accounting to 20 percent of all card-based transactions.

Starting September, China Union Pay and Japan Credit Bureau (JCB) foreign cards will be accepted in India, said Balachandran.

Speaking on the UPI hackathon, NPCI honorary advisor and former Infosys chief executive Nandan Nilekani said banks can use digital footprint to give customers a loan.

"As more and more payments become digital, it creates a digital footprint of your activity and you (customer) can authorise a bank to use your digital footprint to give you a loan," he said.

Tuesday, February 9, 2016

NPCI aims at financial inclusion: Rupay Card News



Aiming at financial inclusion for all with India's domestic card service RuPay, the National Payments Corporation of India (NPCI) said that as many as 170 million of its 230 million customer base were first-time card users.



"We already have as many as 596 members who are in the RuPay network, including national, international and state cooperative banks. We are now trying to get the district central cooperative banks (DCCB) also in the fold," says A P Hota, managing director and CEO of NPCI.



RuPay also helps curb forex loss. For every transaction involving foreign card providers like Visa, MasterCard, American Express, there is the transaction fee on it going out of the country - an estimated 400 crore annually. "With a domestic card service system, there is a tremendous amount of money that India can retain," says M Balachandran, chairman, NPCI.



Another advantage with using RuPay over international card providers for a consumer is when it comes to the merchant discount rate (MDR) - the rate charged by banks providing debit and credit card services to merchants. So normally a food bill of Rs 2,000 or a saree purchase of Rs 4,000 will result in a Rs 20-Rs 40 deducted as MDR.



"With RuPay, the advantage is that we charge a fixed rate. We charge 60 paise on the acquirer bank and 30 paise on the issuer bank - amounting to 90 paise per transaction. Normally debit card interchange is anywhere between 0.65 to 1%. Credit card interchanges could be 1%-2%. So with RuPay, there is lower costs to merchants, which is passed onto the card holder," says NPCI's Hota.



RuPay also has RuPay Platinum and RuPay international, in partnership with Diners' Club and Discover Financial Services, that aims at catering to a wider audience. NPCI plans to launch RuPay credit cards by June.

RuPay cards gaining currency among the poor


More than half the 20.19 crore people who have opened basic bank accounts under the Prime Minister Jan Dhan Yojana have activated their RuPay cards and are using them regularly.
About 90 million RuPay cards – envisaged as a home-grown debit card for the economically weaker sections – are being used in the interoperable system of ATM network facilitated by the National Financial Switch alone, “which is a significant indicator for transactions in these accounts,” AP Hota, Managing Director and Chief Executive Officer, National Payments Corporation of India (NPCI), told BusinessLine.
So far, 170 million cards have been issued to all eligible accountholders. If one also includes use of RuPay cards in their own bank ATMs, the number of active cards in use will cross 100 million. “The combined number of cards in use could be much higher,” Hota said.
The number of RuPay transactions, too, has been increasing steadily. For example, from 20 lakh transactions a day about two-and-a-half months ago, the number has gone up to about 27 lakh, according to NPCI data. The average transaction value is about ₹2,000.
In the last three months, about three crore new accounts were added across the country.
Government data show that the as on January 13, the total balance in these accounts has crossed ₹30,000 crore.
According to a senior executive of State Bank of India, while banks have almost stopped campaigns for new enrolments, people continue to open accounts voluntarily.
Key impetus

New account enrolments are being spurred by, among other reasons, the increasing awareness about the social security cover that accountholders get.
Under the scheme, the RuPay card comes with an inbuilt accident insurance cover of ₹1 lakh for up to 90 days after the cardholder carries out a successful financial or non-financial transaction at a merchant establishment, an ATM or an e-commerce platform.