Showing posts with label credit card transaction. Show all posts
Showing posts with label credit card transaction. Show all posts

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.

Monday, October 21, 2013

Banks yet to cut debit card fee at fuel pumps - Rupay Card

A year after the Reserve Bank of India (RBI) announced a cut in charges on debit card transactions, banks continue to impose a fee of 2.5% for payments at petrol pumps, thereby making an undue gain at the cost of the consumer. Earlier this month, large banks thwarted an attempt by the RBI-promoted National Payments Corporation of India (NPCI) from capping charges on debit cards that are part of NPCI's Rupay network.

Last year, RBI asked banks to cap the charges on debit card transactions at 0.75% for transaction values up to Rs 2,000 and 1% for larger transactions. But in debit card transactions at petrol pumps, banks continue to impose a 2.5% surcharge, which are mostly passed on to the consumer.

Sources said that NPCI had sent a communication to banks asking them not to charge more than 1% on its Rupay cards. Rupay cards were introduced by NPCI as India's answer to MasterCard and Visa. Sources said that the move has been stymied by banks who have called for more discussion on the issue.





The 2.5% surcharge has its origins in the days when credit cards were in their infancy and debit cards non-existent. Typically, when a bank installs a credit card swipe machine at a retail outlet, its agreement with the merchant bars any kind of surcharge being passed on to the customer.

But in the case of petrol pumps and Indian Railways, an exception was made allowing them to pass on the charges (described by banks as 'merchant discount rate'), to the customer. The exception was made to end an impasse where these government entities were refusing cards on the grounds that their margins were too low to absorb the credit card charges of 2.5%.

RBI, while slashing charges on debit cards, had used the rationale that the transaction cost of credit and debit card should not be identical. This was because credit card transactions required the bank to provide free credit to the customer until the monthly bill was issued. The bank also took on the risk of the customer defaulting on his obligations.

In debit cards, the money goes straight out of the customer's bank account and the only expenses are on account of using the network and in respect of security of transaction. In the West, regulators have already started capping charges on debit card transactions.

Bankers say that a huge transformation is taking place in payments as debit card transactions are set to outstrip payments by credit cards in coming years. In July 2013, banks saw 4.23 crore credit card transactions as against 5.24 crore debit card transactions. In value terms, however, credit card transactions continue to be higher at Rs 11,038 crore as against Rs 7,722 crore under debit. With the focus now on financial inclusion, the number of debit cards and set to go even higher.
 

Saturday, October 19, 2013

Banks yet to cut debit card fee at fuel pumps - Rupay Card News

A year after the Reserve Bank of India (RBI) announced a cut in charges on debit card transactions, banks continue to impose a fee of 2.5% for payments at petrol pumps, thereby making an undue gain at the cost of the consumer. Earlier this month, large banks thwarted an attempt by the RBI-promoted National Payments Corporation of India (NPCI) from capping charges on debit cards that are part of NPCI's Rupay network.

Last year, RBI asked banks to cap the charges on debit card transactions at 0.75% for transaction values up to Rs 2,000 and 1% for larger transactions. But in debit card transactions at petrol pumps, banks continue to impose a 2.5% surcharge, which are mostly passed on to the consumer.

Sources said that NPCI had sent a communication to banks asking them not to charge more than 1% on its Rupay cards. Rupay cards were introduced by NPCI as India's answer to MasterCard and Visa. Sources said that the move has been stymied by banks who have called for more discussion on the issue.






 
The 2.5% surcharge has its origins in the days when credit cards were in their infancy and debit cards non-existent. Typically, when a bank installs a credit card swipe machine at a retail outlet, its agreement with the merchant bars any kind of surcharge being passed on to the customer.

But in the case of petrol pumps and Indian Railways, an exception was made allowing them to pass on the charges (described by banks as 'merchant discount rate'), to the customer. The exception was made to end an impasse where these government entities were refusing cards on the grounds that their margins were too low to absorb the credit card charges of 2.5%.

RBI, while slashing charges on debit cards, had used the rationale that the transaction cost of credit and debit card should not be identical. This was because credit card transactions required the bank to provide free credit to the customer until the monthly bill was issued. The bank also took on the risk of the customer defaulting on his obligations.

In debit cards, the money goes straight out of the customer's bank account and the only expenses are on account of using the network and in respect of security of transaction. In the West, regulators have already started capping charges on debit card transactions.

Bankers say that a huge transformation is taking place in payments as debit card transactions are set to outstrip payments by credit cards in coming years. In July 2013, banks saw 4.23 crore credit card transactions as against 5.24 crore debit card transactions. In value terms, however, credit card transactions continue to be higher at Rs 11,038 crore as against Rs 7,722 crore under debit. With the focus now on financial inclusion, the number of debit cards and set to go even higher.