Monday, May 29, 2017

JCB cards get access to ATMs & POS terminals in India via NPCI, Rupay



The National Payments Corporation of India (NPCI) has enabled acceptance of JCB debit and credit cards at ATMs and POS terminals in India, through the National Financial Switch and the Rupay Network. JCB is a credit card issuer and acquirer in Japan, with a card acceptance network across 190 countries and territories, and this launch targets tourists and business travellers from Asia, where JCB This will allow a global card base of 101 million JCB card members (across 23 countries and territories) to pay and withdraw money in India, across 225,000 ATMs and over 2 million Point-of-sales terminals, according to a note from the NPCI. Following this partnership, 32 banks will accept JCB cards on ATMs, and two banks on POS. The formal announcement of this launch follows a pilot project in February with ICICI Bank, Union Bank of India and Indian Bank for JCB credit and debit cards acceptance, and with Axis Bank and ICICI Bank for POS acceptance. No target date for enabling 100% reach for ATMs and POS terminals has been specified by the NPCI.
This is particularly interesting, because it is the connection of two country specific networks independent of Visa, MasterCard and American Express; Rupay was built as a network independent of the two global networks, essentially to lower the cost of transaction, and as if in opposition to them, similar to what China did with UnionPay. On its website, NPCI reasons that since the transaction processing will happen domestically, it would lead to lower cost of clearing and settlement for each transaction.
The link between the two payment networks will also allow NPCI member banks (which is pretty much every major bank), to issue co-badged RuPay-JCB International cards, which will work as RuPay cards in India and JCB cards outside the country. According to the NPCI website, the Rupay Global Card currently works with Discover, Diners and Pulse networks in the Asia Pacific region, Europe, Middle East and Africa, North America and Latin America. In the UK, it works with DC Payments, Moneycorp, Travelex, Youtcash and Cardtronics ATMs.

NPCI to roll out RuPay credit cards soon, says chief A P Hota

National Payments Corporation of India (NPCI), the nodal agency for digital payment systems in the country, will soon launch its RuPay credit cards for which it has roped in a few banks, a top official said. “Our credit cards will be launched soon. These would be RuPay credit cards. A pilot is going on with five banks. In the pilot, about 7,200 transactions have taken place,” NPCI MD & CEO A P Hota said. Punjab National Bank, Central Bank of India, IDBI Bank, Andhra Bank and Union Bank are working under the pilot project.
“Three more banks will come under credit card product. We will launch the RuPay credit cards soon,” Hota said in an interview to PTI. Besides, the agency will also roll-out an inter-operable tap-and-go card for transit fare payments in buses and metro trains.
“We will start these inter-operable tap-and-go cards for transit payment for metro and bus ride. We are starting this tap-and-go card with Bangalore first. From June, the service will be expanded to Kochi and Ahmadabad,” Hota said.
Speaking about digital payment expansion in the country, he said NPCI has now about 2.30 lakh bank ATMs and 3 crore point of sales (POS) terminals under its fold that will help it reach to a maximum people through non-cash mode.
He said installation of micro ATMs by banks through their business correspondents and Aadhaar pay platform will help acceptance of digital payments in rural areas.
“Last year, for all the banks together on the NPCI platform, 9 billion transactions had happened. As per our rough estimate, it was close to one billion till April this year…I believe by 2017-18, it would not be a challenge to meet the 25 billion target as was set in budget,” he added. Hota also said that about 10-12 more banks will join the NPCI infrastructure soon. Currently, there are 44 banks who are already under it.

Saturday, March 18, 2017

How RuPay Card Become the Best Credit/Debit Card of India

RuPay is India’s home grown card scheme, brought to reality by the National Payment Corporation of India.  Founded on March 26, 2012 it competes with the likes of Visa and MasterCard. Currently RuPay has a market share of around 35%, making it the second largest card scheme in terms of numbers (Visa has over 50% of the cards in the market). In this post I will be discussing about RuPay cards.

RuPay
The name has come from two words Rupee and Payment. The three colors orange, green and blue with a white background speaks for itself (Colors of the Indian National Flag).
Coined from two words Rupee and Payment
RuPay Logo
Orange and green in the logo shows that the nation is moving towards growth supported by a fast paced service to the growing nation. Blue indicates trust, peace and security which the people get as a feeling when they own this card.

NPCI
National Payments Corporation of India was formed in December 2008 and promoted by
  • State Bank of India (SBI)
  • Punjab National Bank (PNB)
  • Canara Bank
  • Bank of Baroda (BoB)
  • Bank of India (BoI)
  • Union Bank of India (UBI)
  • Investment Credit and Industrial Corporation of India (ICICI Bank)
  • Housing Development Bank of India (HDFC Bank)
  • Citi Bank
  • Hongkong Shanghai Banking Corporation (HSBC Bank)
It provides services like NFS (National Financial Switch), the Immediate Payment Service (IMPS), National Automated Clearing House (NACH), Aadhaar Payment Bridge System (APBS), RuPay, etc.…
National Payment Corporation of India
The Vision, Mission and Values of NPCI

What motivated NPCI to start RuPay Cards?
As RuPay cards is completing three years in the Indian Market, it is necessary to know what made National Payments Corporation of India to start RuPay cards.
  • Near Duopoly by Visa and MasterCard: – The two giants have dominated the electronic payment market in India. Over 95% of the transactions in India were done over these gateways.

Visa and MasterCard issued in India
Visa and MasterCards issued in India

  • Non-Issuance of ATM cards by small and co-operative banks: – As Visa and MasterCard charge exorbitant fees from the banks as joining fees, most banks did not find it viable to invest a huge sum to provide ATM services.
  • Charge from the customers: – Some retail outlets, charge around 2% per transaction from their customers as outlet owners find it difficult to make their business viable by paying huge transaction fees.
  • Motivated by China’s Union Pay and Japan’s JCB: – These are two payment gateways run by their respective governments, have helped them achieve their goals with their sincere efforts. China’s Union Pay is the world’s second largest payment scheme in terms of transaction value.
  • To serve the RBI’s vision to provide a domestic, open loop and multilateral system in electronic payments to all banks and financial institutions in India.

Benefits of RuPay Cards
  • Low transaction costs: Transaction through RuPay is 90 paisa per transaction irrespective of the value of the transaction. This fee is charged collectively from the merchant’s bank account and card issuer’s bank. Visa and MasterCard charge around 2% per transaction.
  • No Joining fees: Unlike Visa and MasterCard, RuPay doesn’t charge a single penny for joining the RuPay Payment Scheme.
  • Quicker transactions: As the transactions are done locally, the settlement process is faster than its rivals.
  • Data: Customer information is not let out to other countries as the data is secured in India locally.
  • EMV: This stands for Euro Pay, MasterCard and Visa which have set up standards to provide high class secured chip based cards. RuPay has partnered with Discover Financial Services (DFS) to provide EMV based RuPay cards. These cards demand a pin for completing the transaction at every Point-Of-Sale (POS).

Partners
  • A partnership was struck between Discover Financial Services (DFS) and National Payments Corporation of India (NPCI) such that Discover and Diners Club cards are accepted in all NFS ATMs in India and RuPay Global cards would be accepted for international purchases and cash transaction at Discover, Diners Club and PULSE network across all POS terminals worldwide. (They have over 25 million merchants worldwide in almost all nations in the world).
  • NPCI has partnered with Acculynk to provide secure encryption and authenticated consumer PIN for all its customers for e-Commerce purchases under the brand RuPay PaySecure.
  • Indian Railway Catering and Tourism Corporation (IRCTC) has partnered with Union Bank of India (UBI) and NPCI to book tickets and other services using RuPay prepaid cards which have a top-up limit of Rs. 50,000.

RuPay Prepaid Cards
IRCTC has partnered with UBI to launch RuPay Prepaid Cards

  • Japan Credit Bureau International (JCBI) and NPCI have entered into an alliance in which JCB cards would be accepted at all POS terminals and NFS ATMs in India in return for which the NPCI member banks can issue RuPay/JCB cards which would be accepted at all POS terminals in the JCB network worldwide.
  • China’s Union Pay and NPCI have struck a deal such that CUP cards will be used at all RuPay POS terminals in India.
  • Partnership of NPCI with Oxigen group to launch OxiCash Money Transfer which makes Oxigen Wallet India’s First Non-banked Mobile Wallet to provide Instant Money Transfer Service without hassles.

Pradhan Mantri Jan-Dhan Yojana and RuPay
Shri Narendra Damordas Modi, on his first Independence Day speech declared scheme for bringing about financial inclusion in India by bringing the un-banked population in the banking ecosystem. Features what an account holder would receive
  • Zero balance Account.
  • Free RuPay Debit Card.
  • Rs 1, 00,000 life cover and Rs 30,000 accidental cover by Life Insurance Corporation of India (LIC).
  • Overdraft facility of Rs 5000 for each account.
RuPay Payment Scheme benefitted the most from this scheme. The adoption of RuPay cards increased drastically in India making it the second largest Payment Card in India with around 35% market share. Over 25% of the transaction in India is done using RuPay cards across ATMs, POS terminals and e-Commerce Platforms.

IMG_0505
Outdoor Advertisement of RuPay Platinum Cards for foreign business travelers on Airport Road, Bangalore

Achievements
Ø The duo-poly in India is now a story of the old. Now there are three significant players in the payment card market, namely Visa, MasterCard and RuPay in India.
Ø It has 18 prepaid instruments on board who issue RuPay prepaid cards.
Ø RuPay cards are issued by 27 Public Sector Banks, 13 Private Banks and over 250 Co-operative & Gramin Banks. RuPay was a boon to the co-operative banks and its customers due to minimal cost in issuing RuPay cards.
Ø It has won many laurels for itself like “Renaissance Skoch Award” for building country’s own and the fastest adopted card system in the world.
Ø It has broken all records by building a payment gateway in less time, whereas it usually takes around five years to make a fully functional payment system.
Ø It has partnered with Kochi Metro to provide RuPay card services at all its station in the metro network.
Ø RuPay debit cards were issued by the Punjab Government to all commission agents for quicker payments through the ‘Kisan Arthia Information and Remittance Online Network’.
Ø RuPay prepaid cards were issued to AMUL farmers under the brand ‘Kotak Samriddhi’ for direct transfer for their daily produce.

Sunday, March 12, 2017

RuPay transactions on online sites during April 2016-January 2017 is 61.79M



For the period between April 2016 and January 2017, 61.79 million transactions took place on e-commerce websites using RuPay cards. The value of these transactions stood at Rs 4,139 crore. Meanwhile, RuPay card usage at POS terminals for the time period stood at 139.26 million transactions and the value of these stood was Rs 21,227 crore.

Predictably, RuPay card usage at e-commerce sites and POS machines shot up during demonetization period. In December 2016, RuPay saw 11.97 million transactions at online sites with a value of Rs 1,095 crore. POS machine transactions with RuPay cards stood at 47.27 million with the value of the transactions at Rs 7,005 crore.
To give context, for the full financial year 2015-16, e-commerce transactions on the card network stood at 10.24 million transactions with a value of Rs 576 crore.
Note that despite accounting for more than 40% of debit cards issued in the country, RuPay’s usage at online sites and POS machines is low. That can be attributed to the fact that a majority of debit cards issued were from the Jan Dhan Yojana financial inclusion programme.
From MediaNama’s interview with National Payments Corporation of India (NPCI) CEO and MD in may 2016:
On POS and e-commerce, we have not grown our share significantly. The market share for them is still bout 5-6% because the bulk of our cards are  Jan Dhan Yojana cards. The mainstream cards are about 85 million and the Jan Dhan cards are about 180 million. And most of the e-commerce and POS transactions are from mainstream cards.”
However, it is worth noting that the average ticket size of transactions of RuPay cards at ATMs and POS terminals is comparable to the ticket sizes of all debit cards issued. From an April 2016 report from JM Financial, at ATMs, RuPay’s transaction size was Rs 3,045 while at POS terminals, the ticket size was Rs 1,700. For all debit cards, the corresponding figures stood at Rs 3,092 and Rs 1,700.
Bharat QR
Last month, Visa, MasterCard, RuPay and American Express launched the BharatQR an inter-operable QR code payment system for card networks and banks. Around the same time, the Reserve Bank of India (RBI) proposed new slabs for debit card merchant discount rate (MDR) banks will be allowed to charge merchants. It proposed differentiated MDR between acquiring infrastructure involving physical terminals (POS machines, mPOS etc) and digital acceptance infrastructure models (such as QR codes). QR codes payment through cards would attract a fee of 0.3% to 0.85% for merchants. MDR is an inter-bank exchange fee that banks charge for enabling digital transactions. It remains to be seen if BharatQR will increase the usage of debit cards.

Sunday, February 26, 2017

PM Pitches for Digital India, Asks Citizens to Teach BHIM App to 125 Others

PM Pitches for Digital India, Asks Citizens to Teach BHIM App to 125 Others

Declaring digital payments will help fight corruption and proliferation of black money, Prime Minister Narendra Modi on Sunday said each citizen should teach 125 persons how to use the Bharat Interface for Money(BHIM) digital payment app.
"Remembering Babasaheb Ambedkar, you teach at least 125 persons about downloading the BHIM app," Modi said in his monthly 'Mann Ki Baat' radio broadcast.
To encourage digital payments after the November demonetisation of high-value currency notes, the government has recently launched the Bharat Interface for Money (BHIM) mobile app.
IT Minister Ravi Shankar Prasad said earlier this month that the BHIM app had already crossed 140 lakh registrations.
"Lucky Grahak Yojana will complete 100 days on April 14, the birth anniversary of Babasaheb Ambedkar," the Prime Minister said.
Following the ban on Rs 1,000 and Rs 500 currency notes, the government launched the Lucky Grahak Yojna (LGY) for consumers and Digi-Dhan Vyapar Yojana (DVY) for merchants to incentivise them and promote digital payments. The schemes will remain open until April 14.
There are 15,000 daily winners qualifying for total prize money of Rs 1.5 crore, as per the schemes. In addition to this, there are over 14,000 weekly winners qualifying for total prize money of over Rs 8.3 crore every week.
Customers and merchants who use RuPay Card, BHIM/UPI, USSD based *99# service and Aadhaar Enabled Payment Service are eligible for wining daily and weekly lucky draw prizes.
The government has given away over Rs 153.5 crore reward money to nearly 10 lakh citizens under these schemes, NITI Aayog CEO Amitabh Kant said earlier this week.
"It is a delight to learn that till now, under the Digi-Dhan Yojana, 10 lakh people have been rewarded, over 50,000 traders have won prizes and an amount of almost over a 150 crore rupees has been earned as prize money by people who have promoted and carried forward this great campaign," Modi said.

Mastercard, Visa And Rupay Come Together To Launch BharatQR For Digital Payments


Come Monday, Indians will have yet another way to pay.
This time, it’s a QR (quick response) code-based payment solution that will allow merchants to accept digital payments from those who hold a debit card even if they don’t have a card swiping terminal. The product, called BharatQR, has been jointly developed by Mastercard Inc., Visa Inc. and Rupay. It will be formally launched on Monday in Mumbai.
It becomes the second major digital payment option being promoted by the government after the Unified Payments Interface (UPI) based BHIM app. Both are being pitched as an alternative to cash following the November 8 demonetisation decision. While currency availability has now started to normalise, the government is trying to encourage digital payments by making them more convenient and cost effective.

How QR Code-Based Payments Work

A QR code-based payment system works on the existing network of card companies like Mastercard, Visa and Rupay. This means that anyone holding a debit card from any of these providers can pay using a QR code, provided they have downloaded an app from their bank which supports this payment option.
If a customer has the app and wants to make a payment at a merchant who doesn’t have a card swiping machines, he can simply scan the merchant’s QR code and transfer the money directly from the bank account.
Private payment firms like Paytm already offer this facility, but both parties need to have a Paytm account to use it.
BharatQR attempts to overcome this limitation by allowing people to pay without having to choose one payment network over another. This will, however, need a large number of bank apps to support such payments.
QR-based payments have an added advantage of being infrastructure-light. This means that a merchant doesn’t require a lot of equipment to accept digital payments, which reduces costs.
Such a payment system has the potential for take off as it falls under the digital point-of-sale solution segment, for which the Reserve Bank of India (RBI) recently proposed lower merchant discount rates in its draft circular.
Moreover, penetration of card payment infrastructure in India is abysmally low. As of October 2015, there were only 12 lakh point of sale terminals in the country and there are only 6.7 card transactions per capita, much lower than Russia’s 47 and Brazil’s 55, according to a March 11 report by the National Payments Corporation of India and JM Financial Ltd.

A Crowded Payment Ecosystem

The launch of BharatQR will add to an already crowded market for digital payments. There are at least a dozen non-cash payment mediums out there including UPI, mobile wallets, net banking, debit cards and soon-t- be-launched Aadhaar Pay, among others. Individual firms like Paytm also have their own QR- and non-QR-based payment products.
Not all such products have worked.
For instance, Mastercard had launched a QR-code pased payment system in November 2016 called Masterpass. This product, however, remained limited in its reach as it was launched with a tie-up with only RBL Bank. Mastercard will now work with the government to develop BharatQR, which is a wider cross-platform product, Murali Nair, senior vice-president for market development-South Asia at Mastercard, told BloombergQuint in a response to an email on January 23.
Visa declined to comment on the story.

Saturday, February 18, 2017

RBI mulls giving banks freedom to fix bank service charges for transactions



In an attempt to promote cashless transactions in the country, Reserve Bank of India (RBI) has given banks the freedom to fix bank service charges for transactions, stated Santosh Kumar Gangwar, Minister of State in the Ministry of Finance, in Lok Sabha on Friday. 

RBI has deregulated interest rates on credit card dues. Interest rates are determined by banks with the approval of their respective Board of Directors subject to regulatory guidelines on the interest rate on advances issued by RBI from time to time. RBI does not maintain information on the rate of commission charged. 

National Bank for Agriculture and Rural Development (NABARD) has approved a scheme for giving 0.5 percent incentive on payments made through the Aadhaar Enabled Payment System (AEPS) to merchants. 

With regards to debit card transactions on PoS devices, between January 1 and March 31, 2017, Merchant Discount Rate (MDR) has been capped at 0.25 percent for transaction up to Rs. 1,000, and for debit card transactions value between Rs. 1,000 and Rs. 2,000, MDR has been capped at 0.5 percent. 

RBI has decided that till March 3, 2017, banks and prepaid payment instrument issuers shall not levy any charges on customers for transactions up to Rs. 1,000 settled on Immediate Payment Service (IMPS), Unstructured Supplementary Service Data (USSD) and Unified Payments Interface (UPI). 

Further, Government has issued a direction in public interest to all public sector banks not to charge fees for transactions settled on IMPS and UPI in excess of rates charged for National Electronic Funds Transfer (NEFT) for transactions above Rs. 1,000, with service tax being charged at actual; for USSD transactions till March 3, 2017, above Rs. 1,000, a further 50paise discount is provided. 

NPCI has waived switching fees for RuPay Card transactions (both for PoS and e-commerce), IMPS, UPI, National Unified USSD Platform (NUUP) and AEPS, with effect from January 1 to March 31, 2017. 

Credit card, debit card, charge card and other payment card services by banks have been exempted from payment of service tax for transactions of up to Rs. 2,000. The government has introduced Lucky Grahak Yojana for customers and Digi Dhan Yojana for merchants to promote means of cashless transactions. 

In terms of Office of Controller General of Accounts Office Memorandum dated December 14, 2016, the applicable Merchant Discount Rate (MDR) charges on debit cards for payment up to Rs. 1, 00,000 shall be absorbed by the Government. 

In terms of Department of Public Enterprises letter dated December 9, 2016, all Central Public Sector Enterprises (CPSEs) are required to ensure that transaction fees, MDR charges associated with payment through digital means shall not be passed on to the consumers and all such expenses shall be borne by CPSEs. 

RBI has also cautioned the users, holders and traders of Virtual Currencies (VCs), including Bitcoins about the potential financial, operational, legal customer protection and security related risks that they are exposing themselves to. The creation, trading or usage of VCs including Bitcoins, as a medium for payment have not been authorised by the Reserve Bank of India.