Sunday, March 13, 2016

NPCI To Launch RuPay Credit Card By July

NPCI to Launch RuPay Credit Card by July

The National Payments Corporation of India (NPCI) has said it will launch a RuPay credit card by June or July this year. "By June or July we will rollout RuPay version of credit cards," said NPCI chairman M. Balachandran on the margins of a Unified Payment Interface (UPI) hackathon the umbrella organisation for retail payments in the country organised.

He later said the NPCI has escalated its paid-up capital to Rs.137 crore from Rs. 100 crore by broad-basing its stakeholders from public and private sector banks as well.

As many as 56 different banks have shareholding in NPCI despite it being a non-listed entity with no dividend declarations.

"Ours is a non-profit company, and in spite of not being a listed entity and we don't declare dividends, the enthusiasm shown by people to become shareholders in NPCI has been tremendous," said Balachandran.

According to him, there are 241 million RuPay cards in circulation comprising 35 per cent of the total card base in India and accounting to 20 percent of all card-based transactions.

Starting September, China Union Pay and Japan Credit Bureau (JCB) foreign cards will be accepted in India, said Balachandran.

Speaking on the UPI hackathon, NPCI honorary advisor and former Infosys chief executive Nandan Nilekani said banks can use digital footprint to give customers a loan.

"As more and more payments become digital, it creates a digital footprint of your activity and you (customer) can authorise a bank to use your digital footprint to give you a loan," he said.

Tuesday, February 9, 2016

NPCI aims at financial inclusion: Rupay Card News



Aiming at financial inclusion for all with India's domestic card service RuPay, the National Payments Corporation of India (NPCI) said that as many as 170 million of its 230 million customer base were first-time card users.



"We already have as many as 596 members who are in the RuPay network, including national, international and state cooperative banks. We are now trying to get the district central cooperative banks (DCCB) also in the fold," says A P Hota, managing director and CEO of NPCI.



RuPay also helps curb forex loss. For every transaction involving foreign card providers like Visa, MasterCard, American Express, there is the transaction fee on it going out of the country - an estimated 400 crore annually. "With a domestic card service system, there is a tremendous amount of money that India can retain," says M Balachandran, chairman, NPCI.



Another advantage with using RuPay over international card providers for a consumer is when it comes to the merchant discount rate (MDR) - the rate charged by banks providing debit and credit card services to merchants. So normally a food bill of Rs 2,000 or a saree purchase of Rs 4,000 will result in a Rs 20-Rs 40 deducted as MDR.



"With RuPay, the advantage is that we charge a fixed rate. We charge 60 paise on the acquirer bank and 30 paise on the issuer bank - amounting to 90 paise per transaction. Normally debit card interchange is anywhere between 0.65 to 1%. Credit card interchanges could be 1%-2%. So with RuPay, there is lower costs to merchants, which is passed onto the card holder," says NPCI's Hota.



RuPay also has RuPay Platinum and RuPay international, in partnership with Diners' Club and Discover Financial Services, that aims at catering to a wider audience. NPCI plans to launch RuPay credit cards by June.

RuPay cards gaining currency among the poor


More than half the 20.19 crore people who have opened basic bank accounts under the Prime Minister Jan Dhan Yojana have activated their RuPay cards and are using them regularly.
About 90 million RuPay cards – envisaged as a home-grown debit card for the economically weaker sections – are being used in the interoperable system of ATM network facilitated by the National Financial Switch alone, “which is a significant indicator for transactions in these accounts,” AP Hota, Managing Director and Chief Executive Officer, National Payments Corporation of India (NPCI), told BusinessLine.
So far, 170 million cards have been issued to all eligible accountholders. If one also includes use of RuPay cards in their own bank ATMs, the number of active cards in use will cross 100 million. “The combined number of cards in use could be much higher,” Hota said.
The number of RuPay transactions, too, has been increasing steadily. For example, from 20 lakh transactions a day about two-and-a-half months ago, the number has gone up to about 27 lakh, according to NPCI data. The average transaction value is about ₹2,000.
In the last three months, about three crore new accounts were added across the country.
Government data show that the as on January 13, the total balance in these accounts has crossed ₹30,000 crore.
According to a senior executive of State Bank of India, while banks have almost stopped campaigns for new enrolments, people continue to open accounts voluntarily.
Key impetus

New account enrolments are being spurred by, among other reasons, the increasing awareness about the social security cover that accountholders get.
Under the scheme, the RuPay card comes with an inbuilt accident insurance cover of ₹1 lakh for up to 90 days after the cardholder carries out a successful financial or non-financial transaction at a merchant establishment, an ATM or an e-commerce platform.

RuPay Card is a excellent product, no visibility: Industry


India's domestic card service RuPay is an excellent card with better rates than foreign card payment processors for banks, merchants and end-users, but its lack of visibility make for less traction, say industry experts.



Launched in March 2012, RuPay currently has more than 230 million customers and handles 20% of transactions in the country. The card has a lower debit card interchange rate, compared to international service providers, who roughly charge between 0.65%-1% on every transaction. "That's an estimated 400 crore in transaction fees that's going out of the country - which we could retain if we used a domestic card provider," says A P Hota, managing director and CEO of National Payments Corporation of India (NPCI).



The NPCI has also launched RuPay Platinum and RuPay International, in partnership with Diners' Club and Discover Financial Services, and plans to launch RuPay credit cards by this June. "But do people know about these products. Where is the awareness? Where is the advertising? There needs to be visibility," says S Santhanagopalan, president-finance, TVS Iyengar & Sons Pvt Ltd.



Since processing of transactions happens domestically, usage of RuPay over Visa or Mastercard result in a lower cost of clearing and settlement for each transaction. But this transaction affordability should be driving higher growth and more visibility, says



Currently RuPay is accepted in more than 1.88 lakh ATMs in the National Financial Switch (NFS) network. In tune with the idea of a stronger domestic payment network, the NFS itself is run by the NPCI.





"Having a domestic card makes a lot of sense at every level. I've seen the domestic NETS card used in Singalore and its amazing the kind of reach, convenience and ease of transaction. That way, we are light years behind with RuPay," says Sudhakar G, a chartered accountant with BMR & Associates LLP.

Many people are unaware that RuPay is currently issued in 277 banks in India, including all the public-sector banks like State Bank of India, Indian Overseas Bank and all major private banks like ICICI and HDFC.



"I had to ask my private bank to issue me RuPay, because on their own they don't take the initiative to issue the domestic card. I think they already have a good relationship with the international service providers and don't want to jeopardise that," says N Arunkumar, who is employed at a private bank.



"It is an uphill task. We have now talked with some banks and they have agreed to issue RuPay cards on certain days of the month," says NPCI's Hota.

NPCI has also networked with 5 lakh merchants in India and RuPay can be accessed at more than 8.75 lakh POS (point-of-sale) terminals across the country. POSs being the machines one sees at every sale counter at supermarkets, boutiques, restaurants or bars.



"I've seen travel cards in Singapore and its so efficient. The ease of travel is remarkable. I'd certainly see it as a welcome move if any such thing is available in India," says Sudhakar on the NPCI's move to launch a tap-and-go mass transit card in March in Bangalore.

Sunday, November 29, 2015

Govt extends RuPay card usage condition to 90 days regarding insurance claim

Under Pradhan Mantri Jan Dhan Yojana (PMJDY), RuPay Debit Card, with an in-built accident insurance cover of Rs 1 lakh, is provided to account holders. About 16.54 crore RuPay cards have been issued so far under PMJDY.

Rupay

Government has extended RuPay card usage condition to 90 days for a claim under an in-built accident insurance cover in case of RuPay Classic cardholders with effect from November 25, 2015. Under Pradhan Mantri Jan Dhan Yojana (PMJDY), RuPay Debit Card, with an in-built accident insurance cover of Rs 1 lakh, is provided to account holders. About 16.54 crore RuPay cards have been issued so far under PMJDY.
One of the stipulation of meeting the claim under accidental death and/or permanent disablement was that the cardholder has to carry out at least one successful financial or non-financial transactions at a merchant establishment or at ATM or micro ATM or e-commerce transaction, up to 45 days prior to the date of incident, resulting into accidental death /permanent disability.
“This condition was posing problem to RuPay cardholders. Requests were received to increase this condition of 45 days,” Finance Ministry said in a statement.
The issue was taken up by government with National Payment Corporation of India (NPCI), which operates the scheme of RuPay debit cards.
“NPCI has extended 45 days usage condition to 90 days for RuPay Classic cardholders with effect from November, 2015. Accordingly, accident arising on or after 00:00:01 November 25, 2015 will be considered for extended period,” it said.
However, claim intimations on RuPay Classic cards where accident has occurred before November 24, 2015 will not be eligible for claim benefit under 90 days usage condition.
As on November 20, out of 697 claims lodged for accidental insurance under RuPay debit card in PMJDY accounts, 644 claims have been disposed off.

Monday, November 9, 2015

Add-on insurance edge for RuPay



The National Payments Corporation of India (NPCI), which developed the country's home-grown card payment system RuPay, has attributed the system's rapid growth to the insurance cover it provided to its card-holders.

Rupay, which became operational from 2012, have rolled out 206 million cards (as of September-end), acquiring a sizeable market share within a short time.

Of the 206 million cards, 160 million is for bank accounts opened under Pradhan Mantri Jan Dhan Yojana (PMJDY).
"The opportunity was given because of RuPay's inherent strength," said A.P. Hota, CEO and managing director of NPCI.
"The government had weighed and evaluated all card payment systems. At that time, the RuPay card had an inbuilt accident insurance of Rs 1 lakh. When the PMJDY scheme was launched, it was thought that along with the opening of accounts let people have an access to accident insurance. Then (Jan Suraksha) insurance schemes were not present. So, the government chose RuPay by its intrinsic strength," Hota said.

RuPay competes with Visa and MasterCard in India.

Hota said NPCI's non-profit characteristic was another factor behind its growth.

"NPCI is not a profit-making company. All operational benefits go to the same banking community who pays the fees," he said.

Hota said the revenue stream from its different verticals - card payment, Aadhar-based services and mobile-based interbank immediate payment service (IMPS) - were adequate to fund the introduction and upgradation of the payments technology.

Mobile payments

NPCI is working on upgrading and simplifying the existing IMPS system, which is likely to take shape by January.
"In IMPS you can send money instantaneously. But suppose one would like to collect money instantaneously. That would be possible in the new system. We have also tried to dissociate authentication and identity verification. Registration formalities have been tightened. Also, the payment processing service provider is not necessarily your bank. An account can be with one bank but the transaction routing can be through another bank," Hota said.

Eleven banks, including Union Bank, United Bank of India, Bank of Baroda, HSBC, HDFC and ICICI have shown interest in participating in the project. NPCI is also in talks with the SBI, which has the largest bank network.

"This requires regulatory clearance. For the last 45 months we have been in touch with the regulator and are clarifying their questions. We hope to secure approval soon. We will start with a few banks and expand gradually," he said.
NPCI is in the process of bringing in district co-operative banks and regional rural banks under the IMPS network.

RuPay forces MasterCard to call for fair competition


Facing stiff competition from India's own payment gateway RuPay, MasterCard has called for a level-playing field to stay put in the Indian market.

"It is great that the government is opening up the market. But the market should be driven by competition rather than mandate-driven competition," said Ravinder S Aurora, MasterCard group head and senior vice-president.

RuPay, which is run by the National Payments Corporation of India, gained traction in the local market ever since banks started opening accounts under the Pradhan Mantri Jan Dhan Yojana. 

About 154 million RuPay cards have been issued to new non-frills account holders under the PMJDY programme, to add to the 40 million existing RuPay debit cards with regular bank customers. Ru-Pay, which was conceptualised by the Reserve Bank of India in 2009, has cornered about one-third of the market with a of 580 million. China has a similar indigenous card called the Union Pay of China. 

To thwart competition, Aurora said that MasterCard is focusing on innovation and advanced technology for better security features. Not too long ago, MasterCard and Visa Card were predominant in the Indian market, which is now almost equally shared by RuPay and the two global payment solution providers in terms of number of cards issued. 

Bankers said that issuing RuPay cards is cost-effective for them as the fees associated with it is typically lower than the charges levied by Visa or MasterCard. Aurora said that about 10% of MasterCard's global business comes from India. It had invested $250 million in India last year.

It has tied up with E-lala, the ecommerce portal being promoted by Confederation of All India Traders.