Thursday, May 30, 2013

This is how RuPay plans to battle with Visa and MasterCard


The National Payment Corporation of India (NPCI) has charted out a three year growth plan to expand base of its newly launched first ever indigenous payment gateway - Rupay. This in turn, is likely to give a good run for money to the multinational biggies like Visa or MasterCard. 

The National Payment Corporation of India (NPCI) has charted out a three year growth plan to expand base of its newly launched first-ever indigenous payment gateway - Rupay. This in turn, is likely to give a good run for money to the multinational biggies like Visa or MasterCard. It now plans to use its just-launched debit cards for online transactions.

RuPay market share is currently not so significant. However, our growth plan will make it a major rival force to other two existing players in next three-five years, A P Hota, Chief Executive Officer told

We have crossed initial two levels of growth for RuPay. In September, we will add internet acceptability to our existing RuPay debit card. We have already closed a deal with a US based IT-solution provider. Later in March 2013, we will issue RuPay-enabled international debit cards. Finally, we will launch RuPay credit cards in March, 2015, said Hota.

NPCI, promoted by 10 banks under the aegis of Indian Banks Association (IBA) had introduced RuPay enabled ATM cards in June, 2011. Two lakh ATM cards are already in the market. On March 26, 2012 it launched debit cards, which can be used in ATMs and different point of sales (PoS). So far, four banks including Union Bank of India, Bank of India, State Bank of India and Axis Bank have joined the network of RuPay debit cards. This means, a customer of any of those banks can use such debit cards.

NPCI, according to Hota, is in talks with ICICI Bank   and HDFC Bank  , the lenders with majority of PoS terminals. Together these two entitites own more than half of India's 6 lakh total PoS terminals. At present, RuPay is accepted in 2.10 lakh PoS terminals enabled by Axis Bank   and SBI  . Such terminals are kept in different merchant outlets wherein you can swipe your debit or credit card.

Both ICICI Bank and HDFC Bank are in the process of rebuilding the system. They have indicated joining the network in July. So, RuPay card's acceptance in all 6 lakh terminals is a time-taking affair, Hota said.

So, what lure banks to RuPay?

Answer: It is cost effective.

Banks have to pay less to the payment gateway provider. For example, banks have to pay nearly Rs 2 for a customer's transaction size of Rs 1,600 in RuPay network while the same is around Rs 2.80 with Visa or MasterCard.

Secondly, there is no entry fee for banks to enter RuPay network while lenders would have to pay around Rs 25 lakh each in case of other two providers.

Finally, banks need not pay a minimum quarterly fee in the RuPay network. However, the same fee would be in the range of Rs 10-30  lakh for other two major gateways. 

Moreover, RuPay helps in financial inclusion as many co-operative banks and regional rural banks (RRBs) are included in its network.

RuPay has just issued the debit card. They will have to build the customer base on this. We are looking at all options to join any payment network. Once the Rupay's commercial operation get fully functional, we will be able to compare the cost structure of different gateways, said a retail head of a large private sector bank, who does not wish to be named. 

RuPay impact: Banks eye to buy stakes in NPCI

Source :
Banks are eying to buy stakes in the National Payment Corporation of India, the nodal agency for the first-ever indigenous payment gateway  RuPay, which charges less to banks as compared to two others: Visa and MasterCard. Currently, five more banks (both public and private sectors) are looking to take ownership in the NPCI.

Banks are eying to buy stakes in the National Payment Corporation of India (NPCI), the nodal agency for the first-ever indigenous payment gateway  RuPay , which charges less to banks as compared to other two payment gateways: Visa and MasterCard. Currently, five more banks including Axis Bank , IDBI Bank , Central Bank of India , Standard Chartered Bank and Corporation Bank are looking to take ownership in the NPCI, an industry source familiar with the development told

NPCI was established in late 2009. In 2010 ten banks including State Bank of India, Punjab National Bank, Canara Bank, Bank of Baroda, Union bank of India, Bank of India, ICICI Bank, HDFC Bank, Citibank and HSBC had picked up 10% stake each in the NPCI. Each bank had infused Rs 6 crore to bring in Rs 60 crore in total. The authorized capital has been pegged at Rs 300 crore

Narayana Murthy, former chairman, Infosys Technologies is the present chairman of NPCI as nominated by the Reserve Bank of India. An email sent to NPCI remained unanswered at the time of writing this article. has learnt that the top management of NPCI is not so keen in expanding its promoters base. It currently wants to focus more in generating business volume. Moreover, the existing banks are not in favour of increasing the number of promoters. Even, they are ready to bring in more capital to the organization.

The proposal is under discussion. We are hopeful to get the nod. If we have a say in their governance, we can also suggest in their product designing. RuPay will gradually emerge as a major payment gateway wherein all banks will subscribe, said a top official from the Central Bank of India.

Another top official from the IDBI Bank confirmed the development adding that the final decision is not yet taken. Emails sent to Axis Bank and Standard Chartered Bank did not elicit any response.

NPCI was incorporated as a section 25 company under the Companies Act. Hence, it is not bound to give any dividend or share of profit to its promoters. Rather, it has the mandate to redeploy any gains back into the business.

‘Rupay' ATM card planned for no-frills account holders

Global payment processing companies — MasterCard Worldwide and Visa Inc — had better sit up and take notice. An Indian rival is threatening to give them a run for their money.
The National Payment Corporation of India Ltd (NPCI) is trying to break the stranglehold of these companies in the payments space by seeking to launch home-grown ‘Rupay' ATM card for no-frills account (NFA) holders in association with banks.
As part of the financial inclusion drive, banks have been asked by the central bank to open NFAs, with nil or low minimum balances and charges, and have limited facilities such as small overdrafts.

NPCI is banking on its ATM switching infrastructure (the National Financial Switch) so that banks can issue ‘Rupay' cards, which will work only on ATMs and biometric micro ATMs.

Card issuance will begin in a couple of months. NFA account holders can draw money at the ATMs of any bank with the proposed cards. 

“As of now we are talking to four nationalised banks for introducing the Rupay ATM cards, which they will, to begin with, issue only to their no-frills accountholders. It will be a debit card which will work only on ATMs and biometric micro ATMs,” said Mr A.P. Hota, Managing Director and Chief Executive Officer, NPCI.

Unlike the huge fees that banks have to pay global payment companies for processing payments between the banks of merchants and the card issuing banks, the Rupay's unique selling proposition will be that banks will only have to bear the minimum charges, he explained.

“Banks will have to weigh whether to give ‘Rupay ATM cards' only to new customers or also to old customers. They will have to write to customers giving them the option to surrender existing cards and get new ATM cards. This itself is a big job,” said Mr Hota.

Referring to the fact that the country is large and the market big, the NPCI chief observed that there was place for all — Visa, MasterCard and Rupay as well — in the Indian marketplace.

“Ultimately, the winner would be the one who can offer the better product and better service at an affordable rate. If MasterCard and Visa can really provide service at an affordable rate, they will succeed. To beat NPCI or Rupay card, they might really lower their price drastically. And if they can sustain that for a decade, really NPCI is out. We have better things to do,” said Mr Hota.

RRB tie-up
NPCI will also be talking to 82 Regional Rural Banks (RRBs) to introduce the Rupay brand of ATM cards. This will enable RRB customers in the rural and semi-urban areas to also have the convenience of accessing modern banking channels.

NPCI is a non-for-profit company set up in 2009 as an umbrella institution at the behest of the RBI for managing all the retail payment systems in the country. 

It has 10 shareholders — State Bank of India, Punjab National Bank, Canara Bank, Bank of Baroda, Union Bank of India, Bank of India, ICICI Bank, HDFC Bank, Citibank and HSBC.

Monday, May 13, 2013

Central Bank Of India : launched RuPay Debit Card and Wonder Card

Central Bank of India launched RuPay Debit Card and Wonder Card.
In a glittering function at Sorabji House, Fort, Mumbai on 9th May, 2013, Central Bank of India launched RuPay Debit Card and Wonder Card. RuPay debit card is the debut card launched by Central Bank of India on RuPay Platform (Swadeshi Platform) under National Payments Corporation of India. Wonder Card is the unique debit card for salary account customers. This card in-builds the features of debit cum credit card (Overdraft facility).

The dignitaries who were present included Shri M.V. Tanksale, CMD, Central Bank of India, Shri Malaya Mukherjee, ED, Central Bank of India, Shri R.K. Goyal, ED, Central Bank of India, Directors on the Board of Central Bank of India and Shri Dilip Asbe, Chief Technology officer, National Payments Corporation of India.

RuPay Card crosses 3 million mark, to be e-commerce-ready by May 25

MUMBAI: The RuPay Card, India's only homegrown plastic money solution, will be crossing the last hurdle in its push to be present on all the e-payment gateways by getting accepted in the e-commerce space by May 25.

According to RBI-promoted National Payment Corporation of India (NPCI), which developed the card, it is also planning to more than treble the issuance of the RuPay cards to over 10 million by the end of FY14. Within two years of launch, it has issued over 3 million RuPay cards as of end March.

"Come May 25, the RuPay cards will be ready for e-commerce payments. So far, we were present only at the ATM and points-of-sale (PoS) space. With the activation of the RuPay Cards on the e-commerce space we will be present on the entire e-payment space," NPCI Managing Director and Chief Executive A P Hota told PTI here.

NPCI has targeted to take the number of RuPay cards to 10 million by the end of the current fiscal, he said.

However, RuPay has a long long way to go before it can give a run for the money to Visa and MasterCard, the two biggest players in the segment who together have 280 million cards in use in India currently.

As of now, RuPay cards are accepted at all the 1.12 lakh ATMs and around 1.8 lakh out of the 8 lakh merchant terminals in the country, Hota said.

"So, on the PoS space, our focus is to get acceptance by private sector banks which dominate the PoS space. Issuance will be limited to urban cooperatives and regional rural banks," he said, adding 50 of the 54 UCBs have been covered while only a handful of RRBs are left out.

Asked how far it will take the card to break even, Hota said, "hopefully by the seventh year operations. Being service-oriented, our priority is not to make money. We can very well turn profitable if we charge at the rate others are charging. We are a not-for-profit entity building a public infrastructure for the nation."

As of now only eight public lenders - SBI, BoB, PNB, Canara Bank, OBC, BoI, Union Bank and Punjab & Sind Bank, and private sector Federal Bank are issuing the RuPay cards.
That is happening only in rural areas, where they will not be issuing Visa/MasterCard cards. SBI will be issuing only RuPay cards going ahead in the Odisha circle, he said.

Wednesday, May 1, 2013

'Desi' alternative to VISA, Mastercard from July

Come July this year, the National Payments Corporation of India (NPCI)'s RuPay debit card will go 'global' in a strategic tie-up with an American card issuer, Discover Financial Services (DFS) which will offer international acceptance of the card.

With this, RuPay will emerge as an alternative of international payment gateways like VISA or Mastercard and wants to make substantial difference in payment landscape.

In an interview to Deccan Herald, NPCI Managing Director & CEO A P Hota said both RuPay and the US firm DFS would stand to gain from this partnership due to extended distribution network of their respective cardholders. DFS is a banking and payments services firm that competes with payment companies such as Visa and MasterCard, even as it owns the card company Discover, Diners Club cards and Pulse ATM networks.
Unlike Visa and MasterCard, which partner banks to enable them issue cards with similar features, Discover adopts a philosophy of partnering local payment networks across the world, Hota pointed out.

“Also, the RuPay Card is leveraging upon EMV technology of Discover to issue global cards. Cards, terminal and host specifications for the RuPay global cards have already been released to the pilot-member banks. Issuance of RuPay global cards will commence in July with two banks,” he said.

Further, Hota said NPCI has spent over Rs 100 crore on RuPay card scheme infrastructure which is geared to serve all customer segments, across payment channels and form factors.  RuPay, according to him, has clearly defined product roadmap keeping both domestic as well as international needs of prospective customers and banks. 

Under the strategic alliance, Hota added, NPCI and DFS have already announced operationalisation of acceptance of Discover and Diners’ Club cards in India on NPCI’s NFS (National Financial Switch) network. Accordingly, Discover and Diners Club cards now are accepted at over 85,000 DFS ATMs across the country, NPCI chief said. In the coming months, RuPay global cards will be issued and accepted on the Discover, Diners Club International and PULSE networks for international purchases and cash access outside India. This will be followed by the acceptance of Discover and Diners Club cards access at point-of-sale (PoS) terminals for purchases in the country.

NPCI started its services providing cheaper access to third-party ATMs by setting up a network with very low transaction charges coupled with strong support from the Reserve Bank of India. Giving a macro perspective, Botha said, so far 25 commercial banks, 25 regional rural banks, and 30 urban co-operative banks have issued over 1.5 million RuPay cards.  From readiness perspective, all the ATMs in the country are integrated with RuPay.
On financial data, Hota said the project was initially conceived by the RBI and was taken forward for implementation by Indian Banks Association in March 2012.

"We would be able to break-even in this project in five years from when we commenced, which is by financial year 2017-18."  NPCI Board is headed by Infosys Technologies' emeritus chairman N R Narayanamurthy with nominees drawn from RBI and 10 core promoter banks -- State Bank of India, Bank of India, Bank of Baroda, Canara Bank, Punjab National Bank, ICICI Bank, HDFC Bank, Citibank, HSBC.