Showing posts with label mastercard. Show all posts
Showing posts with label mastercard. Show all posts

Tuesday, July 22, 2014

Popularising RuPay Card - State Bank of India Initiative



The State Bank of India, the largest public sector bank started issuing RuPay cards  three months back and has realised the benefits of it.

In India, 90 per cent of credit card transactions are domestic; however, the cost of transactions is high due to monopoly of foreign gateways like Visa and Master cards.

If this process of transactions is made India-centric, cost can come down drastically. In the last 3-4 decades, the usage of credit and debit cards -- what we call the plastic money -- has increased manifold.

Their usage has actually multiplied in the past one decade due to emergence of e-commerce. We can not only make purchases of our needs from a big store by swapping our credit or debit card, we can even purchase air, train, bus ticket; or any commodity from e-commerce websites using this plastic money.

Though banking is no new business in India and credit and debit cards have been issued since long ago; however, these credit and debit cards had essentially been issued in partnership with international gateways like Visa and Master card. It is notable that Visa and Master cards make huge bucks from this business.

According to world Line India, a leading agency providing services in the field of electronic transactions, there are nearly 20 million credit cards in the country; and HDFC Bank, State Bank of India, ICICI Bank and Axis Bank are the main banks issuing most of the credit cards. Apart from this, there were 389 million debit cards in the country in March 2014.

During the last one year (2013-14) 58 million new debit cards were issued. It is notable that after the ATM machines were started being used, all banks have been issuing debit cum ATM cards to their customers, which can be used not only for withdrawing money, but also for making transactions at stores and e-commerce websites.

Foreign gateways like Master and Visa cards charge fee in lieu of their services and huge sum of foreign exchange gets transferred abroad by these companies. Due to monopoly of Master and Visa cards, a hefty fee is charged by them.

Their business in India has been increasing leaps and bounds in the last 10 years. According to RBI, credit cards transactions were Rs 1.56 lakh crore and debit cards transactions Rs 20.22 lakh crore during the year 2013-14.

Foreseeing the importance of an Indian Card, Reserve Bank of India, desired to start an Indian card and National Payment Corporation of India (NPCI), realised this desire and an Indian card in the name of RuPay was started on March 26, 2012.

Today in­­­creasingly the transactions of a majority of Indian banks and financial institutions are being facilitated by RuPay and it is giving a  tough competition to Visa and Master card. NPCI has also tied up with Discover Financial to give RuPay an international acceptance.

International acceptance 


RuPay global card is now accepted at ‘Discover Global Payment Network’ internationally. RuPay was dedicated to the nation on May 8, 2014 by the President of India, Pranab Mukherjee.

RuPay card is accepted on all ATM machines under national financial switch of NPCI. According to the NPCI data there are 1,45,270 ATMs and 8,75,00 points of sale which come under RuPay platform. In addition to this RuPay is accepted on nearly 10,000 e-commerce websites.

Banks recognised by NPCI for this purpose can issue RuPay credit and debit cards which are accepted in ATMs, Points of Sale (PoS) and e-commerce websites. As of now about 240 banks have been issuing RuPay cards. Along with this 200 cooperative and rural banks are also issuing RuPay cards, giving a boost to financial inclusion.

Kotak Mahindra Bank has started a new initiative on financial inclusion; whereby farmers of 75 cooperative societies can get payment for their milk directly to their bank account.

This model is destined to be implemented in Gujarat, where 3 lakh farmers of 1,200 societies will benefit.

It is notable for domestic sector that RuPay fee is merely one third of Master and Visa cards. Though RuPay is cost effective private banks are still not cooperating in adopting RuPay.

Around 150 lakh RuPay cards in circulation now have so far been mostly issued by public sector banks. Argument of private banks is that since they have long period tie-ups with Master and Visa Cards, they cannot adopt RuPay till these agreements expire.

Though private Indian and foreign banks know that in the long run RuPay would prove to be beneficial, they are not ready to adopt new card looking at their short term interests.

The State Bank of India, the largest public sector bank has started issuing RuPay card only three months back and has realised the benefits of the same. According to SBI officials, though it has long term agreement with Master and Visa cards, still it would be good for the bank to pay money to them and switch over completely to RuPay.

Experts believe that if only SBI adopts RuPay fully, the scheme would be a success. Although for international operations, fee of RuPay is yet to be decided, the NPCI says that it would be better to keep it low to maintain it attractiveness in international business also.

In the first week of July 2014, the secretary, department of financial services of the Union ministry of finance has written to CEOs of all the public sector banks urging them to issue RuPay cards to all new customers and the existing customers who have not been issued debit cards so far.

Banks have also been asked to install RuPay card terminals in commercial establishments. So far there is a system of issuing only one type of debit card; however if one desires to get Master and Visa card, he/she can be issued the same along with RuPay card.

Those who are used to Master or Visa card need to be lured gradually towards using RuPay as it will prove to be a win-win situation for all, as it would not only reduce cost of transactions significantly, but also increase the card penetration in the country, especially rural areas.

Monday, July 7, 2014

Govt Asks Banks To Issue Rupay Cards, Mastercard-Visa Feeling The Heat

In the month of May, President Pranab Mukherjee inaugurated RuPay, which is India’s first national payment gateway. Created by National Payments Corporation of India, RuPay has several advantages compared to private payment gateways such as low processing fees, data security and more.

While reporting this exciting news, to be very honest, we were quite skeptical regarding it’s adaptability and wide scale usage. Considering that it is a government owned and supported payment gateway, we assumed that it will take some time to spread and adapt.
But we were very wrong!

In a latest development, government is actively encouraging the usage of RuPay across everywhere, as they want it’s adoption to grow quickly. Such is the intensity of it’s promotion that for the first time in their 30 years of existence, global payment gateway biggies such as MasterCard and Visa are facing the heat.

As per reports coming in, Gurdial Singh Sandhu, secretary at the finance ministry’s department of financial services has asked all nationalized banks to issue debit cards which are RuPay enabled!

Rupay Mastercard visa

Normally, only one debit card is issued per account, but this time, bank officials have been categorically asked to tweak their rules, and issue one more RuPay enabled debit card which can use this new payment gateway.

Not only this, merchant establishments and traders have been specifically requested and encouraged to install sale terminals especially for RuPay enabled debit cards so that a wide scale adaption of India’s new payment gateway is made possible.

Industry experts are fearing that such official diktat from the government to nationalized banks can defer some customers to private banks as they are still using MasterCard or Visa payment gateways.
But AP Hota, MD & CEO of National Payments Corporation of India has rubbished such
apprehensions as he said, “Such fears are unfounded. RuPay is a fully functional card payment system. We are also launching Platinum cards for HNI customers.”

Nationalized banks have now been given 6 months to issue a new RuPay enabled debit card to all it’s existing customers, inform and educate all bank employees in thousands of branches all over India and send an updated report to the government regarding the adaptation and usage.

Just for information, around 2 crore RuPay enabled debit cards have been issued so far.
Last year, Indians spend Rs 80,000 crore using debit cards, and its usage is increasing at an impressive rate of 35% every year. It seems that Indian Government has donned the cap of a startup this time, and is doing everything possible to increase RuPay’s usage. If the same momentum is maintained for another year or so, RuPay can easily capture more than 80% of the market in India, and this is a bad news for private payment gateways.

What is your opinion on the increased effort of Indian government to spread the usage of RuPay? Will it backfire or will it work?

Government asks PSU banks to issue RuPay debit cards to customers, install POS terminals



For the first time in their 30-year existence, Visa and MasterCard, the world's largest payment companies, are facing the heat in India. Lending its weight behind the local card scheme, RuPay, the government has asked state-owned banks to issue RuPay debit cards to customers.

In a communique to banks last week, Gurdial Singh Sandhu, secretary at the finance ministry's department of financial services, "urged" CEOs of public sector banks to issue RuPay cards to all existing customers who do not have debit cards as well as to new clients. Banks have also been told to "encourage" merchant establishments to install point of sale terminals for RuPay cards, two banking sources told ET.

While banks have not been instructed to refrain from issuing cards where transactions are processed by Visa or MasterCard, there is a clear direction to promote RuPay. Customers are typically issued a single debit card per account and banks will have to pursue the unconventional practice and possibly tweak systems to issue two debit cards to a client who insists on a Visa or MasterCard that currently have greater acceptance than RuPay.

RuPay was launched by National Payments Corp of India (NPCI), set up to function as a cost-effective payment services entity. Responding to ET's query on whether PSU banks could lose rich and more brand-conscious customers to private banks (which have not received a similar direction from the finance ministry), AP Hota, MD & CEO of NPCI, said, "Such fears are unfounded. RuPay is a fully functional card payment system. We are also launching Platinum cards for HNI customers."



 "I'm not aware of the ministry's communication to banks. But as I understand, the government's focus is to promote financial inclusion," said Hota of NPCI.

For banks, it's a mandate they will have to fulfil. Within the next six months they will have to offer the new debit card to existing customers, inform thousands of branches and submit progress report to the ministry every quarter.

It's not unusual for countries and governments to support local retail payment networks that offer the software backbone and process card transactions. Countries such as Singapore and Brazil have their local payment companies while China disallows foreign payment firms to process domestic card transactions. But industry sources said an absence of a level playing field may worry global players such as Visa and MasterCard.

For MNC payment firms, the stakes are high. Every year around Rs 80,000 crore worth of debit card spends happen in India, of which 5% are cross-border transactions. It's a market that's growing at close to 35% annually. Credit card transactions, growing at over 25%, are more than two times debit card spends.

Asked whether RuPay would be accepted for transactions such as buying books and music on international e-commerce sites, Hota said NPCI was tying up with the US firm Discover Financial Services to promote co-branded cards to facilitate international transactions.


The fledging card scheme is trying to spread its footprint. So far,A 20 million cards have been issued. "It has full acceptance in ATMs, and of the 10.35 lakh POS (point of sale) terminals in the country, RuPay can be accepted in 9.87 lakh terminals. About 95% of debit card transactions are domestic in nature," said SK Gupta, chief project officer, RuPay. But not all merchant establishments are familiar with RuPay and few display RuPay stickers (along with Visa and MasterCard) on their counters. Till now, POS transactions worth Rs 40 crore have happened through RuPay.

Tuesday, May 27, 2014

Is Rupay A Threat To Global Sharks Like Mastercard & Visa?




Will Rupay become the Indian ultimatum posing a threat to global sharks like MasterCard & Visa?
The current online trasaction system does not allow the participation of all Indian banks & financial institutions in electronic payments.All we yearned for was a open loop,super-secure, multi-lateral sytem which would offer this inclusion. Kudos our very own Rupay...it offer much more!

Working towards enhancing the payment ecosystem in our country,Rupay is all set to support issuance of debit and prepaid cards by over 250 banks ,150 cooperative banks and Regional Rural Banks (RRBs) in India.RuPay functions across three channels  i.e ATMs, Point of Sales (POS) and online payments.  

Key Features:

 Faster Transaction Processing
Rupay offers simplified architecture & transaction flow thereby reducing transaction time, resulting in faster transaction processing and reduction in drop-outs.

 Security
Enhanced security measures are in place in addition to the RBI mandated 2-Factor authentication viz. registration, OTP, image based authentication and anti-phishing measures .Further the bank themed PIN pad shuffles as & when a digit is entered as an additional security measure.

 Contactless
The efficiency  of our innovative contactless payment option can be increased by employing Rupay.

Why Rupay Poses a threat to Visa & MasterCard?

 Lower cost and affordability :
Due to its domesticity, the cost of clearing and settlement  would be lower  This would make the transaction costs affordable & drive increased usage of Rupay cards.

 Customized product offering :
RuPay, being a domestic scheme is committed towards development of customized product and service offerings for Indian consumers.

 Security :
Transaction and customer data related to RuPay card transactions will reside in India.  

 Right pricing-Untapped consumer segment :
Our untapped rural consumers market who do not have access to banking and financial services can be tapped into through Rupay's right pricing. RuPay cards are more economically feasible for banks to offer to their customers. Relevant product variants such as Milk Card, Kisan Card& IRCTC cards would ensure that banks target the unexplored consumer segments. 

 Inter-operability between payment channels and products :
RuPay card is uniquely positioned to offer complete inter-operability between various payments channels and products. NPCI currently offers varied solutions across platforms including ATMs, mobile technology, cheques etc and is extremely well placed in nurturing RuPay cards across these platforms. 

 Truely Unique
Personal accident insurance and permanent disability cover of Rs one lakh is given to the cardholder.This unique feature is not available with any of the international cards Visa & MasterCard!

Wednesday, May 21, 2014

Tap-to-pay Eftpos transactions on the way

Tap-to-pay Eftpos transactions on the way

Shoppers will soon be able to swipe their debit cards for small payments, continuing the enthusiastic adoption of contactless cards in Australia that has accelerated the demise of cash.
Eftpos launches its defence against Visa and MasterCard’s contactless payments in September when banks begin to roll out its contactless cards.

The 30-year-old domestic electronic payments company has raced to replace its aging bilateral network with a hub system in just seven months. This will allow it to upgrade its network twice a year and aid its rollout of contactless payments on chip cards from September.
Transactions on Eftpos’s network declined from 51 per cent of all card transactions in 2011 to 45 per cent in April due to the rapid local take-up of contactless chip cards offered by international card companies.

The acceptance of contactless cards by Woolworths and Coles is a big ­contributor to Australians becoming among the most enthusiastic adopters of contactless cards in the world.

Usage rose from just 12 per cent of card holders in September 2011 to 47 per cent in March 2014, a recent study by RFi and Hewlett Packard found.

The take-up of contactless cards and online shopping led cash usage to fall by 20 per cent between September 2012 and September 2013. Reserve Bank of Australia figures show cash withdrawals declined by about $1 billion to about $15.3 billion per month in December 2013, compared to December 2009.

In the 2013 financial year, the RBA found the amount of cash withdrawn had declined only marginally to $243 billion. But the relative use of cash has fallen because household spending increased by 5 per cent in that time.

Eftpos ‘cheapest payment to take’

Eftpos managing director Bruce Mansfield says the company has made millions of test transactions over its new network, and two of its members – which include all major banks as well as Woolworths and Coles – will begin using it from September.

“Centralised payments hubs are being built around the world, including Faster Payments in the United Kingdom and RuPay in India, just to a name a couple,” Mansfield told the Cards and Payments annual conference in Melbourne last week.

With 14.6 million eftpos-only cards in the market, he said it should be expected that contactless Eftpos would lead to a “percentage of cash transactions replaced by Eftpos contactless”.

Russell Zimmerman, the head of the Australian Retailers Association, says many smaller businesses preferred to receive cash because they incorrectly thought it cost them nothing to accept whereas they had to pay fees to the card companies. But he said any business accepting payments above $20 would prefer to accept payments made via Eftpos, so the availability of contactless payments via that network should ease resistance to accepting non-cash payments. “There should, by rights, be less resistance to Eftpos because it is the cheapest payment to take,” he says.

Eftpos charges merchants a flat fee of about 14¢ per transaction. Visa and MasterCard charge about 0.86 per cent of the transaction total. “If you are going to be selling something at $20 to $30 and above – if you’re a shoe shop or a dress shop – it has to be cheaper to take eftpos,” Zimmerman says.
However, Alex Ballman, head of research at RFi, says Eftpos is not offering anything new to what is already available so its move into contactless and online would be unlikely to make much difference to cash usage. “I am not convinced it is going to have a significant impact,” he says.

Thursday, February 27, 2014

Primary agri co-op societies to operate RuPay card in Dakshina Kannada






 Primary agricultural cooperative societies (PACS) that form the base of the cooperative credit structure are now set to play a major role in financial inclusion, as the South Canara District Central Cooperative (SCDCC) Bank has introduced the facility of RuPay Kisan Credit Card and RuPay Debit Card for them. 


While SCDCC Bank offers the RuPay card facility, around 600 point-of-sale (POS) instruments in PACS and their branches help transact the RuPay card. 

RuPay is a domestic card scheme launched by National Payments Corporation of India. It enables electronic payments at banks and financial institutions in the country. VISA and MasterCard are the foreign payment gateways 

Launching RuPay card facility here, MN Rajendra Kumar, President of SCDCC Bank, claimed that his bank is the first district central cooperative bank to introduce the facility of RuPay cards to PACS. (PACS, numbering 166, are affiliated to SCDCC Bank) 

GR Chintala, Chief General Manager of Nabard, Bangalore, told Business Line that Raigad Central Cooperative Bank in Maharashtra has already issued RuPay kisan credit card. 

He said, probably, SCDCC Bank is the first one where even PACS were taken on board. In Raigad, the accounts of PACS were shifted to the district central cooperative bank. 

In the case of SCDCC Bank, the identity of PACS was retained. The transactions done by PACS are reflected in the books of central cooperative bank. 

Nabard has extended ₹1.46 crore for infrastructure such as RuPay cards, point-of-sales terminals (which are used for swiping cards to do transactions), etc. 

Rajendra Kumar said that all the 166 PACS and their branches will be brought under CBS (core-banking solution) network by the end of December. SCDCC Bank, which has 63 branches, implemented the CBS in 2012. 

Explaining the benefits of RuPay cards to customers, Chintala said apart from RuPay there are two other foreign payment gateways. Now whatever transactions the customers do, the foreign payment gateways debit around Rs 6 per transaction. A lot of money is going out of the country through this.
In the case of RuPay, around 40 paisa is charged per transaction, and the money is retained in India, he said. 

Rajendra Kumar said that the customers of SCDCC Bank and PACS, who have RuPay card, can use it for transactions in any part of the country.

Sunday, February 9, 2014

RuPay Cards to reach 25 m

The National Payment Corporation (NPCI) plans to almost double the number of RuPay Cards, the homegrown rival to Visa and MasterCard, to 25 million over the next two months.

“We have so far issued 14 million RuPay cards, and this will touch 25 million by the end of March,” NPCI Managing Director and Chief Executive Abhay P Hota said.  NPCI is the nodal agency under the Reserve Bank that manages the national payment switch and has developed the RuPay Cards.

RuPay Card, Reserve Bank and domestic lenders-promoted NPCI’s answer to Visa and the MasterCards which control the domestic plastic money market, was launched in April 2012.

It has seen as many as 210 banks, including all public sector banks and some of the leading private sector ones, issuing these domestic debit cards, Hota said. He agreed, however, that most RuPay customers are urban cooperative banks and regional rural banks.

He also said Citi and HSBC will join RuPay system by July. “Today our cards are accepted on all ATMs (1.45 lakh), 8.4 lakh merchant terminals and 70 per cent of the e-commerce merchants,” he said.

About the quick acceptance, he said, for all the stakeholders it makes immense business sense as NPCI charges just 90 paise as the fee per transaction — 60 paise from the merchant and 30 paise from the issuing bank — with the same kind of security; the same on a Visa or MasterCard is as high as Rs 4.

“Our switching fee is only 60 paise for acquiring banks and 30 paise for issuing banks per transaction,” Hota said. On profitability, Hota said, “We will break even by the end of the seventh year (2018-19).”

Hota ruled out entering credit cards business as of now but was confident of traction in the international debit cards. Till now, Bank of Baroda, Central Bank of India and Saraswat Bank have issued RuPay international debit cards, being offered with the California-based Discover Financial Services. 

Tuesday, November 5, 2013

Rural banks asked to promote Rupay cards

The National Payments Corporation of India (NPCI) has pressed the Regional Rural Banks (RRBs) to promote RuPay cards to facilitate electronic payments and transactions among the people living in the remote rural parts.

A team of NPCI, the Central organisation mandated by RBI and Indian Banks Association (IBA) to build central infrastructure for payment systems like ATM switching, mobile payments, 24x7 remittance and financial inclusion transactions, visited Nuapada district and advised Utkal Gramin Bank to issue RuPay cards to their customers on a priority basis.

RuPay has been developed as an alternative to international payment gateways like VISA and Mastercard, providing lower costs and affordability along with protection of payment information related to Indian consumers.

It acts as a domestic open-loop system allowing Indian banks and financial institutions to participate in electronic payments, assistant manager, NPCI, Deepak Satpathy said.

Brand play in cards business - Rupay Card

While Visa and Mastercard slug it out for leadership, analysts say RuPay has the potential to cause disruption and eat into their market share.

Conventional wisdom says customers in India couldn't care less whether they have a Visa, Mastercard, or RuPay in their wallets as credit and debit cards are known more by the issuing banks than the card company. But the three big card brands obviously think otherwise.

While Visa continues to be the larger player in terms of market share, MasterCard is slowly, but surely, bridging the gap by offering additional features on the card.

So how do customers choose between a Visa or MasterCard? According to Nitish Asthana, Executive Director, First Data, ICICI Merchant Services, the affinity of the customer to the issuing bank plays an important role along with the credit limit, simplified applications process, offers, rewards and the reputation of service.

"Visa and MasterCard are well entrenched brands and widely accepted across all merchant outlets and e-commerce websites," he says.

Akhilesh Tuteja, partner and national head, IT Advisory, KPMG India says that both Mastercard and Visa enjoy similar brand value, though Visa is perceived to be a more popular brand than Mastercard because Visa has an aggressive marketing strategy and is seen more often.

"To the end customer, it does not matter whether they hold a Visa card or one from Mastercard because both are accepted at most and similar merchant establishments. Offers and reward points are the other important features of a card. However, these are mostly bank initiated and rarely payment gateway initiated," he says.

Visa is the first card that banks always start their card business with, says Uttam Nayak, Group Country Manager for India and South Asia, Visa. "We are leaders because from a bank's perspective our products are simple and easy to use. Our implementation and execution is robust and we have a developed a template for launches. We know what kind of operating process and IT infrastructure is required, how to write a policy document and our cards are easy to test at POS and ATMs", Nayak says.

If Visa was the first to offer Aadhar as an identity solution for e-KYC, MasterCard is not too far behind and is in the process of launching its own Aadhar linked solution, says Ari Sarker, Division President, South Asia. The gap between Visa and MasterCard is narrowing, he insists.

His claim is borne out by Hari Shenoy, Digital Marketing, brand-comm, who says, Visa leads as far as size is concerned, whilst MasterCard is reportedly accepted in more countries. Visa's network used to be larger previously, but now MasterCard's network is on par. When compared to advantages that a brand like Visa could have, it is increasingly getting narrowed.

"Increasingly, cards tailored for certain lifestyles attract consumers from that segment- eg, Airline co-branded cards that offer better travel rewards, shopping affinity cards, etc. Premium and platinum cards are on the rise," says Asthana of First Data.

Recognizing this, Visa has associations with Olympics and FIFA globally, since these bodies symbolise highest quality of skill sets, points out Nayak. In local markets, the association is with local properties. For instance, in India, Visa tied up with Sachin Tendulkar, way back in 1996.

"From a consumer's perspective, we have tie-ups that are relevant to them. The tie-up with Cafe Coffee Day to offer discounts at airport lounges for Infinite card holders and 10 per cent cash back for frequent flyers are some instance of this. Currently we are working on a platform for bill payments because people have to pay bills," Nayak says.

MasterCard is working on a contact-less card and a pilot project is expected to be launched late this year or early next year, Sarker says.

Apart from convenience and tie-ups, security is another area of concern for customers while choosing the card and both players are aware of this. Both of them offer the 'Zero-liability feature' in their cards, where in if the card is stolen or misplaced, the cardholder is not liable to pay for any transaction made on the card. "We realise that fraud is a big concern and we put customer at the centre of everything," Visa's Nayak says.
Another feature that Visa has introduced is Visa Risk Manager, which was introduced in 2011. This identifies a transaction that is not typical of the customers' transaction and blocks it. On its part, MasterCard has a similar feature, called MasterCard inControl. The technology allows cardholders to determine how, when and where a card may be used. Issuers can deliver real time information to cardholders and establish controls.

According to KPMG's Tuteja, Visa scores on dispute resolution because the process smoother. This also shows that Visa has made better investments in their back-end support system than Mastercard.
Queering the pitch for them could be RuPay, which has recently entered the e-commerce space and is part of the payment gateway options, making analysts bullish on its prospects. Shenoy agrees that RuPay has the potential to cause disruption and eat into Visa and MasterCard's market share. "Many nationalised banks, cooperative banks and a few private banks are part of the RuPay network. It has a lower transaction fees that will benefit banks as well", he says.

Loyalty programs will be key and will drive stickiness to merchants and banks alike. Customers are expected to seek value on the transaction experience, with features such as secure wallet and time of the transaction on the internet gaining more prominence in the decision.

SLUGGING IT OUT

Mastercard
• Plans a contact-less card, where you can tap and pay
• Will launch MasterCard inControl with cap on expenses
• Offers zero-liability feature in which transactions made through PoS will be covered

Visa
• Offers zero-liability feature
• Offers Visa Risk Manager -identifies transaction(s) that is not typical of a customer and blocks it
• Working on a platform for utility bill payments

Wednesday, October 23, 2013

Insurance cover coming for online fraud - Rupay Card


Both Visa and MasterCard offer this feature. RuPay cards by NPCI will also start offering this by the end of this year or early January,

With the rise in cases of online fraud, National Payments Corporation of India (NPCI) has decided to provide an insurance cover for such transactions.

NPCI will tie up with general insurance companies for this; it has called for a Request For Proposal (RFP). This would cover both domestic and international transactions, all those done by swiping a card, PIN-based transactions on ATMs or points of sale and e-commerce transactions with two-step authentication.

According to the Kaspersky Consumer Security Risks Survey, a global study conducted by B2B International and Kaspersky Lab in the summer of 2013, about 41 per cent of users who lost their money as the result of financial cyber-fraud failed to get a single cent returned to them. And, only 45 per cent of users who suffered through online fraud were fully compensated. In 17 per cent of cases the money disappeared during e-banking sessions; 13 per cent of the victims were customers of online stores.

“Technology is changing the fraud landscape and challenging the boundaries of fraud risk management. The (earlier) frameworks to mitigate simple frauds are no longer effective,” Rohit Mahajan, partner and co-head, forensic services, at KPMG in India, had said while issuing an India Fraud Survey last year.

The NPCI insurance cover will be over and above any policy taken by a member-bank. The policy will cover compromised and disputed transactions carried on the National Financial Switch (which facilitates inter-bank ATM transactions) ATM Network. It will also cover disputed transactions on the NFS Network. The RFP issued by NPCI is to identify and appoint the general insurer for providing insurance cover for fraudulent transactions that result in financial loss to the customers of NFS members or sub-members; also for non-bank ATM operators.

“This is a good opportunity for the insurance community. We will be interested in taking part in the bidding process, since it is a large and prestigious contract,” said a senior official of a state-owned general insurance company.

NPCI will initially cover Rs 180 crore of approved financial transactions under the insurance policy with the selected bidder. If the transaction volume goes beyond the initial committed volume of Rs 180 crore, NPCI shall request an additional cover.

The overall insurance cover that will be provided will be Rs 10 crore and the per-card cover will be Rs 50,000. The insurer (which wins the bid) will have to settle claims within 30 days of claim submission by NPCI. Further, the bidder will also have to honour the request from any member-bank(s) for any additional cover sought, once the policy is issued to NPCI and is in force. The premiums will be paid by NPCI.

To be eligible for the bid, an insurance company should have a minimum of three years of operations in general insurance in India as on March 31. Also, a minimum gross direct premium income of Rs 250 crore for 2011-12 and 2012-13, respectively. The non-life insurer is also required to have a minimum claim settlement ratio of 75 per cent in the past three financial years and not be currently blacklisted by NPCI, any government body or financial institution in India. All this would mean only the large private general insurers and the four state-owned general insurance companies will be eligible.

In case of a disputed transaction using a debit/credit card, it is the customer's responsibility to prove he is not at fault. Till then, they are liable to pay for the transaction. As a protection against this, one can opt for credit or debit cards which have the zero-liability feature. Both Visa and MasterCard offer this feature. RuPay cards by NPCI will also start offering this by the end of this year or early January, said an official.

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.
 

Zero-liability cards are useful - Rupay Cards

The sheer fear of loss of a credit or debit card can give ulcers to most. Besides the monetary liability, it involves running from pillar to post to get the card blocked.

In case of a disputed transaction, it is the customer's responsibility to prove it is not his fault. Till then, he is liable to pay for the transaction. Eventually, if the customer is able to prove he is not at fault, the bank will refund the amount, but this could take time. To protect yourself against this, you can opt for credit or debit cards which have the zero-liability feature. Both Visa and MasterCard offer this feature. RuPay will start offering this by the end of this year or early January, said an official from National Payments Corporation of India. But unless your card issuing bank offers this facility, you cannot avail of it. Banks have to incur an additional cost for the insurance to cover the liability in case of a loss of card, which pushes up their cost, which is why not all banks offer it, while some offer it on select cards.

The advantage of this is that once the card is reported stolen or lost, the cardholder is not liable to pay for any transaction made on the card. In case of a debit card, the amount transacted will be restored to the cardholder's account.

While this is a given in some parts of the world, in India banks offer it selectively, says Uttam Nayak, group country manager for India and south Asia, Visa. The card company introduced this feature in India in 2004. There is no additional fee that the customer pays for this. “We realised that fraud was a big concern for customers,” he says.

ICICI Bank, HDFC Bank, Axis Bank and Standard Chartered Bank do offer this. But cardholders need to keep in mind the feature will not work in case of an automated teller machine or online transactions, since this requires the use of the PIN. It will work only if the card is used to swipe at a point of sales, at a shop or a merchant establishment.

Some banks may ask you for a written application with your card number, account number (in case of debit card) and date of loss of card; copy of the police complaint and copy of passport in case of a fraud abroad. While some banks insist the theft or loss should be reported within 24 hours for the facility to kick in, some allow up to 15 days.

While zero-liability as a policy is in countries like the US, in India it is not so. The Reserve Bank of India has indicated it would like to introduce a system whereby the customer would not be held liable in case of fraud transactions. But there has been no further guideline or further instruction from the regulator.

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.

Tuesday, September 3, 2013

Reaching out to farmers, the electronic way

http://www.livemint.com/Specials/LgMbbY5MhP2wjTKpIzqqUL/Reaching-out-to-farmers-the-electronic-way.html

India’s first card payment network, RuPay, similar to Visa and MasterCard, is changing the way farmers are banking 

RuPay, India’s first card payment network similar to Visa and MasterCard, is changing how farmers are banking and handling their money. 

Take the case of Mahesh Kumar, 38, a farmer on the outskirts of Mumbai. He used to withdraw the entire Rs.1.5 lakh of annual farm credit he was entitled to under the Kisan credit card scheme in a single instance, and end up paying huge sums in interest.

Last year, he began using a RuPay Kisan card instead to withdraw smaller sums of his entitlement from automated teller machines as well as to make payments at retail stores. “It has made life very easy. Now, I can withdraw small amounts of money any time and save on interest costs,” he said.

Crop loans of up to Rs.3 lakh are disbursed at an annual interest rate of 7%, according to the ministry of agriculture’s website. The government provides interest subvention of 3% per annum on prompt repayment, effectively making the crop loans available at 4%.

The Kisan credit card was launched in 1998-99 by then finance minister Yashwant Sinha to help farmers make smarter decisions on how to use cash for cultivation rather than depend on suppliers who were funded by banks.

RuPay was conceived to offer a domestic system that will allow all Indian banks and financial institutions to participate in electronic payments. Through RuPay Kisan cards, farmers are now able to make electronic payments. For a bank, the RuPay cards mean lower transaction costs than MasterCard- or Visa-branded cards.

RuPay was launched in March 2012 by the National Payment Corp. of India (NPCI), and currently cards affiliated to it are issued by 20 state-run banks, six private banks and 84 cooperative and gramin banks that cater to people in small towns and villages.

“We now have 6 million cards in circulation, out of which 2.7 million are Kisan cards, 2.5 million are with cooperative banks and the remaining are with mainstream banks,” said A.P. Hota, chief executive and managing director of NPCI. He hopes to issue 150 million cards in two-three years.

On 6 August, Dombivali Nagari Sahakari Bank Ltd became the first scheduled urban cooperative bank to introduce RuPay debit cards. Milind Varerkar, general manager, said it was “the first time we issued debit cards and it is through the RuPay network, as the Visa and MasterCard software loading proves to be very expensive”.

“From a bank’s perspective, RuPay network is cheaper,” said C. Sumoth, chief manager (priority sector advances department), Federal Bank Ltd. “It will help a bank save at least 25-30% on switching and cardholding cost compared with using a Visa or a MasterCard platform.” Federal Bank has issued 10,000 RuPay-branded debit cards since it launched these in April.

“Competition is always welcome,” said Visa Inc.’s group country manager for India and South Asia Uttam Nayak. “We undeniably accept that they (RuPay) have support of the government,nationalized banks and shareholder banks, but the market opportunity is huge.”

Calls to Ari Sarker, division president, South Asia, MasterCard Worldwide, went unanswered.
In June, NPCI also launched PaySecure for RuPay cards, an e-commerce system similar to PayPal that allows secure online payments. Until now, these cards worked only at ATMs and point-of-sale terminals at retail outlets.

Shekhar Ganapathy, general manager for South Asia at ACI Worldwide Inc., which provides software for banks to help recognize transactions made through RuPay cards, believes the network has a good chance of success if its reach improves.

According to the Reserve Bank of India, there are around 120,000 ATMs and about 1 million point-of-sale (PoS) terminals in the country. While customers can use RuPay cards at all ATMs, most PoS terminals are yet to be configured to accept it. “As of now, only 25-30% of the PoS machines in the country accept RuPay card. Hence, there are issues when it comes to swiping the cards at other terminals,” said Sumoth of Federal Bank.

The penetration of RuPay cards is slow, admitted Hota. “Out of the nine lakh (900,000) PoS terminals, RuPay works on 2.7 lakh terminals,” he said, attributing the delay in acceptance to software upgradation that is being done manually. “To get private sector banks and mainstream banks to convert to RuPay cards full-time will be our biggest challenge,” he said.

RuPay will soon be available as an international card in collaboration with DFS Services Llc, a US payment network. “RuPay, by default, is a domestic card, but an international variant will be available soon,” Hota said.

RuPay is a step in the right direction and a starting point that can be applicable to the rest of the market,” said Bharat Poddar, partner and director, Boston Consulting Group. “And with RuPay set to launch international cards, it can help solve the problem that inhibits its acceptability in high-end markets.”

Thursday, May 30, 2013

This is how RuPay plans to battle with Visa and MasterCard

Source: http://www.moneycontrol.com/news/business/this-is-how-rupay-plans-to-battlevisamastercard_686243.html

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 Moneycontrol.com.

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 : http://www.moneycontrol.com/news/business/rupay-impact-banks-eye-to-buy-stakesncpi-_687351.html
 
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 Moneycontrol.com.

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.

Moneycontrol.com 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.

Wednesday, May 1, 2013

'Desi' alternative to VISA, Mastercard from July

http://www.deccanherald.com/content/329727/039desi039-alternative-visa-mastercard-july.html

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.

Wednesday, April 17, 2013

NPCI to launch RuPay global cards by July

National Payments Corporation of India (NPCI) today said its RuPay debit card will go international by July and announced a tie-up with an American card issuer.

Announcing the tie-up with Discover here, NPCI Chief Executive A P Hota said both RuPay and the American firm stand to gain from this partnership due to extended distribution network of their respective cardholders.

"The RuPay Card is also leveraging upon EMV technology of Discover to issue global cards. Cards, terminal and host specifications for the RuPay global cards have since been released to the pilot-member banks. Issuance of RuPay global cards will commence in July with two banks," Hota said.

NPCI and Discover Financial Services also announced operationalisation of acceptance of Discover and Diners' Club cards in India on NPCI's NFS (National Financial Switch) network.

As part of a strategic alliance, announced last year, Discover and Diners Club cards now are accepted at over 85,000 NFS ATMs across the country, Hota 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 terminals for purchases in the country.

Monday, April 8, 2013

Desi card RuPay gets global access

The National Payments Corporation of India (NPCI), which plans to rival Visa and MasterCard with its own RuPay Card, has got a leg up in its plans to provide international access to future RuPay cardholders following a tie-up with Discover Financial Services.

On Friday the two partners, entered the first phase of their partnership by providing Discover cardholders access to 85,000 ATMs in India which are part of the NPCI network.

Discover Financial Services is a banking and payments services company which competes with payment companies such as Visa and MasterCard and 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, including in China, Japan and Korea.


In China, Discover has partnered UnionPay, the largest network in China which will become available to RuPay global cardholders. Worldwide, Discover has a network of two crore retail outlets and 9.5 lakh ATMs which accept Discover Cards.

"We purely partner and do not have ambitions to compete with domestic networks," said David Nelms, chairman & CEO of Discover. He added that the Diner's Club credit card, which is being issued by HDFC Bank in India, is expected to grow significantly in numbers. "The alliance with NPCI marks another milestone for discover as the company has established network to network alliances across the globe. We plan to expand our acceptance footprint in the coming years throughout the country and provide our card members from all across the world the ability to use their cards at merchants across major metros and key tourist destinations in India," he added.

According to A P Hota, MD & CEO of NPCI, issuance of RuPay International cards would begin from July 2013 with two banks. NPCI started its services providing cheaper access to third-party ATMs by setting up a network with very low transaction charges with strong support from the Reserve Bank of India.

The next stage was to issue RuPay debit cards which would be accepted at merchant establishments across the country. The payments company has already enrolled around 85,000 point of sales terminals where Rupay cards can be accepted.

In the third stage, in May RuPay will have its own e-commerce platform to enable cardholders make purchases online at websites such as Indian Railways. "Rupay is also leveraging the EMV (chip card) technology of Discover to issue global cards. Cards, terminal and host specifications for RuPay Global Cards on D-PAS have since been released to banks," said Hota.