Wednesday, September 24, 2014

Top Differences between RuPay Card vs Mastercard, Visa and AmEx

RuPay card is India’s answer to the two most dominant market transaction processing players in the world Visa, MasterCard, AmEx owned by Visa Inc., MasterCard Inc. and American Express Co. respectively. India is now the sixth country in the world to have domestic payment gateway system. Other five countries are US, Japan, China, Singapore and Brazil.

Having our own domestic card payment network which helps in electronic money transfers will help both banks (between 200-250 member banks) and consumers in the following way:
  • Processing Fee: Since every transaction through RuPay will take place within India, the banks will have to pay less service charge to the payment gateway as compared to Visa, MasterCard and others. For e.g. If a person does a transaction of say Rs. 2,000 then banks will have to pay around  Rs.. 2.50 when RuPay is used whereas for the same transaction amount, Visa or Mastercard will charge Rs. 3.25. Technically speaking, transactions done through international cards is processed in foreign country which involves higher charge which helps in generating profit for Visa/MasterCard whereas RuPay transactions would happen domestically so charge would be less.
  • Faster transactions: Since processing would be down within India the transactions would be faster as compared to other cards.
  • International Acceptance: As of now RuPay card doesn’t have international acceptance, whereas Visa or Mastercard have been in the market since many years and accepted by most of retailers online or offline such as Amazon, eBay, Walmart and others. Also National Payments Corp of India (NPCI) who promotes RuPay card is working hard to spread it’s acceptance worldwide by partnering with Discover Financial Services and Japan Credit Bureau (JCB). Read more about where you can use RuPay card and how to use the card for online payments
  • Quarterly Fee: In case of Visa and others banks have to pay a quarterly fee which won’t be required in case of RuPay.
  • Card Type: Currently RuPay offers only debit card whereas Visa and MasterCard offers debit, credit and debit card. However RuPay credit card would be made available hopefully by March 2015.
  • Entry Fee: In case of international cards banks have to pay entry fee to be a part of their network which is not the case with RuPay card i.e. no joining fee for the banks.
  • Member Banks: RuPay card is offered by public sector, select private banks, rural and co-operative banks (total 200-250 member banks) whereas others don’t include such small banks in their network. Checkout eligibility for getting RuPay card and withdrawal limit.
Also to increase it’s spread recently Government of India launched Jan Dhan Scheme under which every account holder would receive RuPay debit card. See also Jan Dhan Yojana benefits. This will directly increase RuPay’s use.

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