Discover Financial Services will get access to a network of around 85000 ATM’s which come under NPCI . Rupay card holders will also get advantage of Discover’s partnership with Union Pay, the largest network in China.
RuPay is the Indian domestic card payment network being set up by National Payments Corporation of India (NPCI) with the objectives to Build an environment whereby payment information of the country remains within the country and Shift Personal Consumption Expenditure (PCE) from cash to electronic payments in a growing economy with a population of 1.2 billion.
According to A P Hota, MD and CEO of NPCI, issuance of Rupay International cards will begin from July 2013. The company has already enrolled 85000 POS where Rupay card can be accepted. NPCI would approach for final approval for rolling out RuPay cards that would be accepted on all channels.Currently RuPay is in Phase II of including the ATM, credit and debit cards in India and abroad.NPCI is working towards acceptance of RuPay for E-Commerce in third stage where it will have its own ecommerce platform to enable cardholders make purchases online.
At present, domestic card Rupay faces direct competition with Mastercard and Visa. With the recent collaboration of Mastercard and Beam, the Indian consumer can connect their existing mobile wallet to MasterCard acceptance and electronic payments to pay for utility bills make fund transfers, book movie or travel tickets, and withdrawing money from ATMs as well as Beam franchisees. Also, mastercard and visa have developed their trust in providing secure online shopping to prevent chargebacks and frauds gaining confidence of the electronic retailers to ship orders.
Advantages of Rupay over Mastercard and Visa
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.
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.
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.
RuPay helps in financial inclusion, the delivery of financial services at affordable costs to vast sections of disadvantaged and low income groups (for example “no frill accounts”) as many co-operative banks and regional rural banks (RRBs) are included in its network.
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