Friday, November 30, 2012

Oriental Bank launches 2 RuPay card variants

Oriental Bank of Commerce (OBC) on Saturday became the first bank to offer ‘RuPay Kisan Card’ with ‘Aadhaar’ authentication.
The Aadhaar number (unique identification number of the farmer) is stamped on to the card and on the magnetic strip behind it, making its use easier on micro-ATMs.
This is expected to provide a further thrust to the financial inclusion initiatives of the bank.
This will help a customer (farmer) with the Kisan card to not only withdraw funds from any ATM, but also use micro-ATMs through biometric authentication.
RuPay Kisan card will be issued by OBC to a select group of customers who now avail of the Kisan credit card facility from the bank.
In all, OBC has 4.41 lakh Kisan credit card accounts. So, potentially, this Kisan card could be handed out to at least 4 lakh existing customers.
OBC became the 25{+t}{+h} bank to use RuPay, a domestic card network set up by the National Payment Corporation of India. The NPCI’s debit card platform was launched in March last year. S. L. Bansal, Chairman and Managing Director, OBC launched two variants of the RuPay cards — RuPay ATM card and RuPay Kisan card.

Lower costs

These cards will significantly reduce transaction costs for the bank as the costs involved in RuPay debit card system are lower than the existing international card schemes. “The cost saving for OBC will be as high as 75 per cent”, said Bansal.
He also urged OBC’s 18,000-strong workforce to go in for RuPay ATM card. “Although we are a late entrant into the RuPay debit card payment platform, we should look at beating the big peer banks in terms of usage”.
Bansal said the RuPay cards would be given free to the bank’s customers.
A. P. Hota, Managing Director and CEO, NPCI, said currently around 1.2 million debit cards (issued by 25 banks) were under the RuPay platform. The RuPay system has been activated in 54,000 of the 6.5 lakh point of sale (POS) terminals in the country. By January next year, all the 6.5 lakh POS will be covered, Hota said.

Tuesday, November 20, 2012

RuPay cards to be acceptable at all PoS terminals by Jan

According to National Payment Corporation of India, at present it is accepted in 48,000 merchant terminals 

RuPay, the domestic debit card payment platform, launched by the National Payment Corporation of India, is likely to be acceptable at all PoS (point of sales) terminals in the country from January, a top NPCI official said here today.

"The RuPay will be acceptable at all PoS terminals from January. At present, it is accepted in 48,000 merchant terminals," NPCI Managing Director and Chief Executive A P Hota told reporters here on the sidelines of a banking summit organised by FICCI and IBA.

According to the RBI data, there are around 91,000 ATMs and 6.5 lakh PoS terminals in the country now. While the RuPay cards, launched in April last year, is acceptable at all ATMs, most of PoS terminals are yet to accept it.

PoS terminals are devices where debit and credit cards are swiped to carry out electronic transactions.


At present, around 22 banks use the RuPay card-based payment system in the country. While commercial banks like Union Bank of India, Bank of India, State Bank of India and Axis Bank have joined the RuPay network, the rest 18 banks comprise of regional rural banks (RRBs) and co-operative banks.


"We hope that many more banks will join the new payment system in the near future," Hota said, adding it will come up with an international debit card next June.


Hota also said given the cost advantage, which is around 40% lower than the international payment systems like Visa or MasterCard, banks would adopt RuPay to save cost.


Talking about the launch of credit cards, he said they are concentrating on debit card segment for three years, after which, they would look into credit card space.

Thursday, November 8, 2012

NPCI Selects Thinksoft To Validate Its Payments Systems

Thinksoft Global Services Limited (Thinksoft), the Financial Software Testing Company, has announced that the National Payments Corporation of India (NPCI) has signed up to utilise and leverage Thinksoft’s expertise and support services to enhance the quality of NPCI’s compliance and certification programmes related to its products and services.

Thinksoft will design and develop the compliance program set-up, study the certification program practices, review and suggest improvements in the process, define the certification program and the certification authority. The project duration is for 3 years.

NPCI, on behalf of banks in India, is setting up RuPay, the Indian domestic card payment network, which has the approval of the Reserve Bank of India. RuPay intends to bring down the overall transaction cost for the banks in India, provide card payment options to banks, develop products for financial inclusion of the common man and thereby build an environment to shift cash payments to electronic payments.

A P Hota, MD and CEO, NPCI said, “It was through a tender process where two service providers were selected, one of which is Thinksoft,   to develop and implement Compliance Programme and support NPCI in certifying member banks and institutions of their compliance to NPCI’s standards in respect of its various business products and services. NPCI proposes to leverage Thinksoft’s expertise to effectively undertake the project.”

Asvini Kumar, Managing Director, Thinksoft said, “The NPCI project is very close to Thinksoft’s mission of leveraging our expertise to support organisations enhance their customer experience by optimising their systems, offerings and products. It is an acknowledgement of Thinksoft’s core expertise in focused testing methodology, testing process, and the years of sustained and exemplary performance in the BFSI, that NPCI has decided to entrust Thinksoft with the critical assignment.”

Thinksoft will be setting up an exclusive test bench, and will have experienced project managers working on defining the compliance program, test requirements definition and certification program execution.

Syndicate Bank launches RuPay Kisan Card

Syndicate Bank has set an ambitious target to achieve Rs 3.5 lakh crore total business by March 2013.
Speaking at the bank’s 87th Founders Day celebration, M.G. Sanghvi, Chairman and Managing Director, Syndicate Bank, said so far the bank has achieved Rs 2.85 lakh crore of business. 

“This target is achievable for us. We are in the process of rolling out 200 more branches and this will help us achieve it,” he added. 

To mark the Founders Day, the bank introduced new products - Syndicate Bank International VISA Gold Debit Card, Syndicate Bank RuPay Kisan Card, SyndNavarathna - a savings account for salaried class and Online Donations Payment Towards the Prime Minister’s National Relief Fund. 

M. Anjaneya Prasad, Executive Director of Syndicate Bank, said “The bank in association with National Payment Corporation of India (NPCI) will be issuing Syndicate Bank RuPay Kisan Card to farmers, who have availed Kisan credit card facility from the bank.” 

“The card is enabled for ATM Cash withdrawal. The RuPay Kisan card will give further thrust to the financial inclusion initiatives by offering low-cost payment system,” he added. 

The bank’s SyndNavaratna is a savings bank account targeted towards the salaried employees.
The product has nine features such as Zero Balance, Sweep-in–Sweep out facility, overdraft facility etc.
Uttam Nayak, Group Country Manager – India & South Asia, VISA, explained that the SynidcateBank VISA Gold Debit Card is bearing the name and photo of the cardholder.

Wednesday, April 4, 2012

Banks can save Rs300 crore annually by switching over to RuPay: NPCI


“Adoption of the RuPay Card will help banks save Rs250-Rs300 crore annually as our interchange charge is cheaper by up to 40% than what banks pay to foreign cards like Visa and MasterCard,” NPCI managing director and chief executive officer AP Hota said

Mumbai: A switchover to RuPay Card, the Indian version of Visa or MasterCard, can help domestic banks save as much Rs300 crore annually in transaction fees, reports PTI quoting the National Payments Corporation of India (NPCI), which launched the card last week.

“Adoption of the RuPay Card will help banks save Rs250-Rs300 crore annually as our interchange charge is cheaper by up to 40% than what banks pay to foreign cards like Visa and MasterCard,” NPCI managing director and chief executive officer AP Hota told PTI.

After years of preparation and soft launch, NPCI commercially launched RuPay Card on 26th March with major banks such as SBI, BoB, UBI, BoI, Corporation Bank and Axis Bank launching their domestic debit cards on the RuPay platform.

This makes the country second after China to have an indigenous electronic payment card.
Typically, banks pay around 1.8% of the transaction value in interchange charges. This is shared between the payment gateway operators like Visa and MasterCard, the card issuing bank, and the merchant.
While the card-issuing bank charges around 0.25%-0.30% of this, an equal amount is taken in by the merchant too, with the rest being retained by the card company such as Visa.

But Mr Hota said NCPI will retain only up to 60% of this around 1.2% going by the current fee structure.
According to the banks, foreign cards charge around $30,000-$50,000 as one-time fee and around $10,000-$30,000 quarterly.

In FY09-10, according to the Reserve Bank of India (RBI), domestic banks coughed out Rs490 crore in interchange charges to Visa and MasterCard.

For RuPay, there will be no one-time joining fee, and other charges would be around 40% less.
All the major banks are likely to be on the RuPay network in six months, Mr Hota said, adding that there was no compulsion to switch to the RuPay. “Our low cost should be reason enough for them to adopt our card. By March 2015, I expect at least half the market under the RuPay.”

His optimism comes from the low penetration among the regional rural banks, co-operative banks and small commercial banks due to high cost of joining foreign card payment system.

Another advantage, he said, is that as the transaction happens domestically, it will lead to lower cost of clearing and settlement, apart from the facility of paying in rupee.

Being a not-for profit company also helps us lower the cost, Mr Hota said.

He also said the RuPay would make debit cards safer by incorporating the pin number with each transaction. At present, only MasterCard requires the user to furnish the pin number every time the card is used.
RuPay will be accepted at all the 91,000 ATMs and over 6 lakh points of sale terminals in the country and in due course, it will be accepted on the Internet and also at ATMs/PoS terminals abroad. NPCI has finalised an arrangement with payment gateway Discover for international acceptance.

According to RBI data, there are nearly 27 crore debit cards in the country today.

SBI managing director and chief financial officer Diwakar Gupta said that though there is no compulsion, it makes business sense for banks to adopt RuPay.

Monday, March 12, 2012

Discover Financial Agrees To Alliance With Payments Group In India

 Source: http://online.wsj.com/article/BT-CO-20120307-709504.html

--Discover to process transactions made with India's RuPay cards
--Discover and Diner's Club cards will be able to be used at ATMs and merchant terminals in India
--Discover is trying to grow its international footprint
 
NEW YORK -(Dow Jones)- Discover Financial Services (DFS) will process transactions made by cards on India's RuPay payment network under a deal aimed at bolstering Discover's international footprint.
The Riverwoods, Ill.-based credit-card company said Wednesday its alliance with the National Payments Corporation of India will also allow its own cardholders to use their cards at ATMs and merchant terminals in India.

The National Payments Corporation of India was established in 2009 to develop a payments card network similar those operated by Visa Inc. (V) and MasterCard Inc. (MA) for India. That network, RuPay, is still being built out.

"By opening up our global payments network to RuPay cardmembers, we are participating in one of the fastest growing countries for payment cards in the world," Diane Offereins, executive vice president and president of payment services at Discover, said in a statement. "Discover and Diner's Club cardmembers also will benefit from their ability to more broadly use their cards to access cash or make purchases throughout India."

Discover has had a presence in India, including a deal in which HDFC Bank, an Indian bank, issues Diner's Club cards in the country. Diner's Club is owned by Discover.

Discover, like American Express Co. (AXP), typically issues its own credit cards and operates a payments network that processes transactions, unlike Visa and MasterCard, which only process transactions. Higher transaction volume helps boost their revenue.

Discover has a smaller acceptance footprint internationally than does American Express, Visa and MasterCard, though it has been working to change that.

"We're working aggressively to make sure we have strong franchises in India and in China to make sure we can capture" growth in those markets, Roger Hochschild, president and chief operating officer of Discover, said at an investor conference last month.

As part of the new agreement, RuPay card transactions made outside India will be processed over Discover as well as Discover's Diner's Club and Pulse ATM networks. The deal will be rolled out in a "phased manner, starting with acceptance of Discover and Diner's Club cards at RuPay ATMs in India, followed by merchant terminals in India.

The deal is a "nice win for Discover," Sanjay Sakhrani, an analyst with Keefe, Bruyette & Woods, wrote in a research note Wednesday. However, the financial benefits of the deal aren't likely to come until the later stages of the rollout, Sakhrani wrote.

Discover's shares are up more than 38% over the last year. Its shares were up 1.4% at $30.34 in recent trading.

Monday, February 13, 2012

NPCI to launch PIN-based debit cards by March

Rupay Card Logo
Source : http://www.livemint.com/2012/02/05182551/NPCI-to-launch-PINbased-debit.html?h=B

NPCI is in talks with big banks such as ICICI Bank Ltd, HDFC Bank Ltd, Corporation Bank and IDBI Bank Ltd among others to issue RuPay debit card

National Payment Council of India (NPCI), set up by the Reserve Bank of India to promote card payments system, will launch its RuPay debit card in March. RuPay is the country’s first domestic payment card network and aims to match existing payment facilitators such as Visa and MasterCard and provide debit and credit card services.

“The countdown has begun and around 20-25 March we will launch RuPay debit card,” says A.P. Hota, chief executive officer and managing director of NPCI. “It will be a personal identification number (PIN)-based debit card and not a signature-based card.”

At present, RuPay automated teller machine (ATM) cards are available with a few rural banks.

What will you get?

Since it is a PIN-based card, it will be more secure than signature-based cards. Here, the verification is done via a PIN and not a signature. “The card will be PIN-based and will have a magnetic stripe on the reverse side. Disputes are less in PIN-based transactions,” Hota says.

The RuPay debit card can be used across all ATMs in the country. It can also be used at 200,000 point of sales (PoS) terminals which are expected to come up by March and increase to 600,000 by June. The RuPay debit card can only be used in India as of now.

NPCI is in talks with big banks such as ICICI Bank Ltd, HDFC Bank Ltd, Corporation Bank and IDBI Bank Ltd among others to issue RuPay debit card. NPCI’s promoter banks such as State Bank of India, Bank of India, Bank of Baroda, Union Bank of India, Canara Bank and Punjab National Bank have already agreed to issue RuPay debit cards. At least 10 leading banks are expected to launch RuPay debit cards in a few months.
N. Sheshadri, executive director, Bank of India, says, “we are building the infrastructure and customers will have one more option to choose from, with RuPay.” The RuPay card could be used for online transactions by June and will involve a two-factor authentication process.
“NPCI is recommending that banks should issue RuPay cards for its new customers and cards that come for renewal. We are not advocating that banks should change existing cards to RuPay. If banks decide to do so, banks will have to bear the cost,” Hota says.
But if an existing customer wants to shift from Visa or MasterCard to RuPay, banks will be able to do so. RuPay debit card is expected to be ready for international use by January 2013. NPCI has no plans to enter the credit card market in the next three years.

What will banks get?

“Banks would get simplified fee structure with just three-four types of service charges,” Hota says. In addition, since NPCI will not have a minimum transaction volume clause, even medium to small banks such as cooperative banks would be able to offer its customers this card payment system. Moreover, since NPCI would be using a rack rate charge, there would be transparency in charges. “The charges for RuPay will be substantially lower than its competitors,” Hota says. “We would charge around one-third less than others. Which means when others charge Rs. 100, we would charge Rs. 70-75. We have decided on charges but talks are still on. However, we will definitely be a low cost provider.” On average banks pay around Rs. 300 crore per year to Visa and Mastercard for processing all debit and credit card payments.

Thursday, February 2, 2012

RuPay may Open the Gateway to Inclusion

Source : http://epaper.timesofindia.com/Default/Scripting/ArticleWin.asp?From=Archive&Source=Page&Skin=ETNEW&BaseHref=ETM/2011/10/12&PageLabel=23&EntityId=Ar02300&ViewMode=HTML

A few years ago, an arm of the Reserve Bank of India had launched the inter-bank ATM switch, a device that allows automated teller machines to talk to each other. This prompted the RBI to waive off an additional transaction fee that debit card holders incurred on using ATMs of other banks. The move, which initially faced the flak of the banking industry, led to an explosion in ATM usage across the country. Another such flare-up looks imminent with the upcoming launch of RuPay, a domestic payment gateway akin to global networks such as Visa and MasterCards.
Though industry experts are once again skeptical on the government playing the role of a service provider, if the ATM experience is anything to go by, creation of a domestic payment network will widen the role of credit providers, giving a boost to financial inclusion in the country’s vast rural hinterland.
Coming at an opportune time, when electronic payments are being seen as a tool to reach out to the unbanked, the RuPay card system — an initiative of the RBI-promoted National Payments Corporation of India — is creating unease among global card associations as it will reduce overall transaction cost for banks by introducing competition to international card schemes.
Recently, Visa invited some 50 Indian urban co-operative banks to make a presentation on its products with an aim to lure local lenders to join the global payments network. Visa’s efforts to connect with urban cooperative lenders, hitherto not a priority for card associations such as Visa and MasterCard, just five months
ahead of the RuPay launch is being viewed by experts as prompted by fear of impending competition.
Currently, Indian banks pay . 200-300 crore to Visa and MasterCard for processing debit and credit cards. This cost is expected to come down after the launch of RuPay card system, which is likely to charge a lower processing fee. The benefit of a lower fee will be reaped by customers as well to whom the banks pass on the cost.
The RuPay system will also lower the cost of transactions for shops that are reluctant to use the electronic mode of payment on which they
currently lose 1.5% of their margin. “Currently, the merchant fee is significantly high and there is room to bring it down,” says AP Hota, chief executive officer, NPCI. China already has its domestic payment network Union Pay, a benchmark against which RuPay may be compared. Union Pay has 200 member banks, including 30 outside China, and is accepted in 104 countries. The European Union has also been talking about a region-wide payments network.
The RuPay system also aims to build an environment in which payment information remains within the country. “Why should the transaction go international and expose itself to various risks,” says Hota.
Highlighting the high cost of creating a payment network, Visa and MasterCard feel that payment networks work better when there are fewer of them.

Ajay Banga, chief executive officer, MasterCard, in his maiden visit to India, after taking charge, pointed out that the launch of a local card system will not dilute the relevance of global card networks. Several countries where domestic proprietary networks were set up had turned to MasterCard to ensure that banks have the latest technologies, including fraud management, sophisticated scoring, fast transaction approvals, among others, he said. If every country strives to set up its own payment network, it would not only be very expensive, but also lead to systemic inefficiencies, he added. Amex and Visa also feel that they will continue to remain relevant in a market where growth opportunity is immense. Of the total bank consumer transactions in India, less than 5%, or nearly . 1.14 lakh crore, are in the electronic form. While the urban middle class is slowly migrating to electronic payments for bills, millions of man hours are still wasted by people standing in queues.
Uttam Nayak, India head of Visa, says that the country has a long way to go in electronification of payments. “But where I look for answers is in the kind of investments they (NPCI) will bring in. Secondly, they will have to convince customers that it is the most secure, reliable and convenient mode of payment,” he says. 


ROAD MAP
In the first stage, NPCI has launched the RuPay debit card. The first such card was issued by Gopinath Patil Parsik Janata Sahakari Bank. Although, not a debit card, the RuPay ATM card allows customers of rural banks and small cooperatives to ac
cess a wider ATM network.
According to Hota of NPCI, which has PSU banks as its stakeholders — the roadmap for RuPay is ready. The company plans to start with a RuPay debit card by the end of this fiscal, which will be accepted in 50,000 domestic merchant establishments. In the initial phase, RuPay will not have an international reach and can be used only for domestic transactions. “But, currently, over 94% of all transactions by Indian cardholders are within India,” says Hota. “However, we will have a leeway from the RBI to talk to international players about the acceptance of this card outside India.” Subsequently, NPCI will roll out credit cards, but that would be three years from now. 


CHALLENGES

The immediate test for the RuPay payment system will be to strike a chord with rural merchant associations and shops in order to build a payment network where the poorest customer has access to electronic fund transfer.
Also, such a network would require an investment of more than . 1,000 crore by the banking industry without immediate returns. The Unique Identification Authority of India and Indian Banks Association have identified the need for 12-14 lakh micro-ATMs, which are point of sale machines given to business correspondents.
Moreover, an increasing usage of mobile transactions, which enable direct debit through mobile phones, could pose a major challenge to the RuPay.



Wednesday, February 1, 2012

NPCI ties up with BoI for "RuPay" cards

Source : http://www.moneylife.in/article/npci-ties-up-with-boi-for-rupay-cards/17465.html

The card, named “Dhan Aadhar”, has the 12-digit Aadhar number given by the Unique Identification Authority of India, besides the conventional 19-digit number

The indigenous alternative in the payments space to Mastercard and Visa, RuPay, took a big stride with Reserve Bank of India-promoted National Payments Corporation of India (NPCI) launching the card in partnership with Bank of India. Bank of India becomes the fourth partner bank for NPCI. Over the past two months, it has tied up with three regional rural and co-operative banks and distributed 10,000 cards, NPCI's managing director and chief executive AP Hota said.

The card, named "Dhan Aadhar", has the 12-digit Aadhar number given by the Unique Identification Authority of India, besides the conventional 19-digit number. It also carries a photograph of the accountholder, which helps it serve as an ID-card like a passport, Bank of India chairman and managing director Alok Misra said. The Padgha village was chosen for the launch as all the residents in the local gram panchayat have already got Aadhar numbers, he said. Hota said his organisation has already integrated with the servers of the UIDAI which would enable it real time access to cross-verify details like biometrics and photograph.

Through this card, an accountholder can transact by giving thumb impression at a terminal manned by a business correspondent in the rural areas while it can act like a conventional card at an ATM, where the accountholder will have to give a four-digit PIN, he added. When asked if it will also allow transactions at merchant outlets and work like a debit card, Hota replied in the negative. The NPCI would be required to do more integration and call for more regulatory clarity to do so, he said.

Thursday, January 5, 2012

Indian 'Rupay' Card Causes Trouble In Asia For MasterCard, Visa

Source : http://www.forbes.com/sites/greatspeculations/2011/04/06/indian-rupay-card-causes-trouble-in-asia-for-mastercard-visa/

The National Payments Corporation of India has finalized the commercial launch of the proposed India card which would be a domestic alternative to the global payment processing firms. MasterCard is the second largest global payment solutions company in the world and provides a variety of services to support the credit, debit and related card payments of over 24,000 financial institutions globally and given the size of India, this could have an impact on MasterCard’s international transactions growth, which we discuss below.

Its main competitors are Visa, American Express and Discover Financial.

Transaction processing is the major revenue source for MasterCard and by our estimates constitutes about 32% of the $293 Trefis price estimate for MasterCard’s stock.

The Reserve Bank of India in 2009, had asked the Indian Bank Association to launch a non-profit payment solutions company to meet the requirements of domestic banks. After almost two years of planning, NPCI has finalized the name of the proposed card as Rupay which will launch later this year.

The Rupay will resemble China’s Union Pay which is the domestic real-time payment processing firm for Chinese banks.


RBI in its vision paper on payment systems in India said that the need for such a system arises from two major considerations: 1) the absence of a domestic price setter has caused the Indian banks to bear the high cost for affiliation with international card associations, and 2) the connection with international card associations resulting in the need for routing even domestic transactions, which account for more than 90% of the total, through a switch located outside the country.


Electronic Payment Market in India
India has been one of the fastest growing countries for payment cards in the Asia-Pacific region. According to the RBI, debit card transactions in India rose 49% in January 2011 to reach Rs. 37 billion (approximately $830 million) from about Rs. 25 billion ($557 million) last year. The number of debit cards in use also rose by 25% during this period. Credit card transactions also rose 28% in January 2011 compared to last year to about Rs 69 billion ($1.54 billion).

How is MasterCard Affected?
In our analysis of MasterCard, we estimate that the number of transactions processed by MasterCard will grow from 22.6 billion in 2010 to about 56.8 billion by the end of our forecast period at a compound annual growth rate of 14%. Much of this growth will come from the Asia-Pacific region as consumers in this region are only beginning to embrace widespread use of electronic payment methods.

If India card Rupay gained popularity and other countries in the Asia-Pacific region decide to follow suit, MasterCard’s number of transactions could only grow at a rate of lower rate than we forecast. In a scenario where the number of transactions processed by MasterCard would reach only 50 billion by the end our forecast period and grow at a slower rate of around 12% annually, this would cut our price estimate for MasterCard by about 5%

Visa & MasterCard gone. Rupay card, bring it on

Rupay Card Logo
Source : http://www.moneycontrol.com/news/cnbc-tv18-comments/visamastercard-gone-rupay-card-bring-it-on_559115.html


Finally it's here! The much talked about India card which will replace global payment players MasterCard and Visa in India. CNBC-TV18's Gopika Gopakumar finds out more about the Rupay Cards.

It may not be long before the logos of Visa and MasterCard disappear from your plastic cards. Instead these will be replaced by an Indian name Rupay. This is the new card payment scheme launched by the National Payment Corporation of India, a company started three years back by 10 banks, to oversee all retail payment systems in India. Currently, all card payments are routed through Visa or Mastercard which process these transactions outside the country, but this may not be the case in the future.

"There should be something domestic. Payment information is very sensitive. So there has to be repository of payment information with some institution. Why should banks in India pay such high fee to MasterCard or Visa," AP Hota, CEO, National Payments Corporation of India said.

Currently, banks pay around Rs 300 crore every year to Visa and MasterCard for processing all debit and credit card payments. NPCI says Rupay will reduce the cost for both banks and customers.
"We believe that it's possible to reduce the processing fee that banks pay to MasteraCard and Visa by half if not more. Rupay will be aiming at reducing the cost for the bank," Hota added.
Bankers too feel Rupay will be a viable option.

Alok Mishra, CMD, Bank of India , said, “It is indigenous and will be cheaper. Most people here don't travel abroad nor do they need settlement for Visa, MasterCard. What they require is a settlement here. And I think Rupay will work for them.”

Rupay's strategy
To begin with it focuses on tying up with 82 regional rural banks and 100 urban cooperative banks. Having issued 10,000 debit cards, it now plans to scale up by issuing Aadhar-enabled financial inclusion cards.
NPCI says it will be a while before the commercial banks start issuing Rupay debit cards as most of them already have tie-ups with global players. Besides, the regulator favours competition in this segment and so unlike the Chinese, may not make it mandatory.