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

Thursday, May 14, 2015

SBI launches RuPay Platinum debit card

 

Country's largest lender State Bank today launched a RuPay Platinum debit card in association with National Payment Corporation of India (NPCI).


"With the growth of the Indian economy, our customers have evolved and their lifestyle and aspirations are at par with their global counterparts. It is an apt addition to our existing portfolio of debit cards," SBI Chairman Arundhati Bhattacharya told reporters here today.

Commenting on the product NPCI Managing Director and CEO A P Hota said, "The RuPay card comes with a special feature for the convenience of customers that is accepted at all payment channels- ATMs, PoS and eCommerce."

He said that NPCI will soon launch international RuPay debit cards allowing its customers to use them outside the country besides issuing RuPay credit cards by January 2016.

The card would be initially issued free to customers maintaining a quarterly balance of Rs 50,000.
The card offers various benefits like 5 per cent cash back on utility bills, complimentary airport lounge access, personal accident death and permanent total disability insurance cover of Rs 2 lakh, among others.

Currently, SBI has 19.7 crore debit cards in circulation and of which 4.5 crore are RuPay cards.
In the year ended March 2015, the bank saw a 37 per cent rise in its debit card transaction at Rs 30,785 crore from Rs 22,407 crore last year.

Meanwhile, replying to a query on SBI converting its office into a full fledged branch in Tehran after the country inked a pact with Iran to develop Chabahar port, Bhhatacharya said there was no immediate plan for it.

"We have to just wait and watch to see whether there is enough traction for us and then we will take a call," she said.




Sunday, April 26, 2015

PSU Bank RuPay Cards Now E-Commerce Enabled: NPCI

PSU Bank RuPay Cards Now E-Commerce Enabled: NPCI

The National Payments Corporation of India (NPCI) on Monday said it has completed system integration to enable e-commerce transactions through RuPay cards of public sector banks.

"RuPay card holders of all public sector banks are now e-commerce enabled. Card-holders can now conveniently purchase rail, road and air tickets by logging into the websites of travel companies or buy goods and services from online stores," an NPCI statement said.

Multiple levels of integration with the bank servers are required for enabling transactions like ATM usage, usage at point of sale terminals and e-commerce thorough the cards.

The RuPay cards, launched by the Reserve Bank of India-promoted NPCI, are alternative to foreign cards like Visa and MasterCard, which earn high revenue for facilitating transactions. There are 140 million RuPay cards in use at present.

The state-run lenders are the most active in issuing these indigenous cards.

For using the RuPay card for e-commerce transactions, a one-time user registration will have to be done at the time of the first transaction after which there would be the standard two-factor authentication process.

Over 30,000 online merchants in the country now accept RuPay cards, which includes Flipkart, IRCTC, Jet Airways, Snapdeal, Life Insurance Corp (LIC), Bookmyshow and Homeshop18.

Soon, RuPay ATM Cards for Student Account Holders

In a first-ofits- kind initiative, the Kozhikode District Cooperative Bank (KDCB) will be issuing exclusive RuPay ATM cards for student account holders. Aimed at attracting younger generation to KDCB, the savings bank account scheme of KDCB for minors is awaiting the final nod from the National Payments Commission of India (NPCI).

In the first phase, KDCB’s plan is to encourage high school and higher secondary schools of the district to open savings bank account for minors within a year. The scheme will be implemented with the support of the Education Department, and the account will be linked to the Aadhaar number. KDCB has also designed a colourful Student RuPay card, which is entirely different from the bank’s debit card.
According to KDCB general manager Abdul Mujeeb, currently majority of the customers who are availing of the facilities of KDCB belongs to the older generation. “KDCB’s Student Rupay card scheme not only aims to attract youth to the bank but also to impart knowledge on new banking technologies to them. We are expecting the final approval from the NPCI at the end of this month,” the general manager said.

Further explaining, Abdul Mujeeb said: “RBI norms allow any person who is above the age of 10 years to open a savings bank account. However, KDCB is the first banking institution, perhaps in the country, to design a special scheme in a bid to encourage the students to do banking of their own.”
As per the scheme, any boy or girl of 10 years of age can open a savings bank account with any of the branches of KDCB in the individual’s name by depositing a minimum amount of Rs 100. Though there is no need for the parent or guardian for joining in, the minor will have to get his specimen signature attested by the parent.

The savings bank account of minors will have facilities like internet banking, debit card and ATM in addition to cheque book facility. However, the minor has to ensure a continuous minimum balance of Rs 500 to avail of the cheque book facility. Moreover, the cheque issued from a minor account will bear a prescription indicating the same and it would be valid only for a maximum amount of Rs 5,000.

According to the KDCB general manager, besides students, the scheme would be beneficial to
parents as well as the educational institutions.

Sunday, April 5, 2015

RuPay Card Offers 1% Cashback: What to Know



RuPay Card Offers 1% Cashback: What to Know

The RuPay card, launched by the National Payments Corporation of India (NPCI), is now offering 1 per cent cashback in a direct challenge to international payment card companies like Visa and MasterCard. The cashback facility is available across all RuPay debit cards, which can be used at ATMs, point of sale terminals (PoS), and online transactions.

This implies whatever purchase one makes using the RuPay card, 1 per cent of that purchase amount will be credited back to the account of the cardholder.

Apart from public sector banks, RuPay cards are also issued by regional rural banks, co-operative banks and some private sector banks.

Here are the other benefits of RuPay cards.

1) Lower Cost: Being of Indian origin, RuPay card is cost effective for users as it charges lower processing fees for domestic transactions compared to other cards. "Since the transaction processing will happen domestically, it would lead to lower cost of clearing and settlement for each transaction," NCPI says on its website.

2) Faster Processing: All RuPay card payments are processed within India. This makes RupPay card transactions faster than other international cards.

3) Security: RuPay being a domestically developed card, all transaction and customer data related to this card transaction reside in India. It has also launched an e-commerce solution called PaySecure, which provides a secure platform for e-transactions. The platform offers enhanced security measures in addition to the RBI mandated 2-factor authentication requirement like registration, one-time password (OTP), image-based authentication and anti-phising measures.

Like other international debit cards, RuPay cards also use EVM (Europay, Master, and Visa) chip, a global standard for credit card and debit card payments based on chip card technology. In an EVM card each transaction at point of sales is authenticated through entry of a personal identification number to verify the genuineness of cardholder.

EVM-based cards have more security features than magnetic-strip cards where typically only the card's number and expiry date is processed. EVM cards contain more information which needs to be verified at a point-of-sales transaction, making transactions more secure.