Dear Readers,
The
RuPay card has recently been in the news for its increasing reach and
availability.
With
the introduction of RuPay, there have been some significant developments in the
Indian financial sector and it becomes crucial to understand these changes and
the elementary concept behind the RuPay card. This article will look at the background
and objectives of NPCI, the need for RuPay and its expected impact and
benefits.
Launched
in March 2012 by NPCI as a medium to enable a unified payment medium, the RuPay
card has also become a part of the Pradhan Mantri Jan Dhan Yojna (PMJDY). The
PMJDY was introduced in August 2014 by Prime Minister Narendra Modi as a device
to eradicate “financial untouchability”.
Background of NPCI
·
After
establishing the Board for Payment and Settlement Systems in 2005, the Reserve
Bank of India released a vision document which proposed to bring into place a
broader organization for unifying all the Retail Payments Systems in the
nation.
·
Thus,
the National Payments Corporation of India came into existence in December
2008, and its Certificate of Commencement of Business was released in April
2009.
·
Currently,
the NPCI has ten core promoter banks – 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 bank.
Objectives of NPCI
·
To
integrate the diverse systems with varied levels of service into one nationwide
uniform and standard business procedure for all the retail payment systems.
·
To
provide an economical payment system in order to help the general public across
the entire nation and facilitate financial inclusion.
·
To
provide the citizens of India anytime, anywhere payment services which are simple,
hassle-free, safe, quick and economical.
What is the RuPay
Card?
·
RuPay
is a payment scheme introduced by the NPCI. The term “RuPay” is coined from the
words, “rupee” and “payment”, which denotes that RuPay stands for transactions
made in the Indian National Rupee.
·
It
was created by the RBI to fulfil the vision of constructing a domestic,
open-loop, multilateral system that will let all the Indian banks and financial
bodies of the country to take part in unified electronic payments.
·
The
launch of RuPay was aimed at creating an exclusively Indian payment medium, and
to develop an Indian counterpart of international cards like Visa and MasterCard.
·
When
NPCI came up with this idea, it was initially named IndiaPay but later renamed
to RuPay in order to avoid any possibility of naming conflicts.
Benefits of RuPay
· Lower Transaction
Fee – Transactions
done through international cards are processed in foreign countries and thus, it
amounts to higher transaction charges. Since every RuPay transaction will be
taking place in India itself, service charges would lessen for banks to get
through to the payment gateways. On using RuPay, NPCI will charge 45 paise per
transaction at ATMS and 90 paise for transactions at point-of-sale (POS) establishments.
· Customized
Products – By
virtue of being a domestic product, RuPay is dedicated to serving Indian
customers and will be concentrating on developing products and schemes, solely
for Indians and their needs.
· Protection of
Customer Information – While performing a transaction, elementary information
of a customer is sought and now that RuPay will enable these payments within
Indian networks, no customer info will get out and will be secured inside the
country itself.
· Facilitation of
Electronic Payment in Unexplored Regions – There are untapped segments in
rural parts of India where access to banking and financial provisions is still
unavailable. The reasonable pricing of the RuPay card will make it more
economically viable for banks to provide to their customers.
· Operability among
Various Platforms – The
RuPay card is well positioned to offer inter-operability among a multitude of
payment channels and products. Since it is a unification of different modes of
payment like ATMs, mobile banking and cheques, it holds vast possibilities of being
applicable across several payment media.
· Member Banks – The RuPay card
will be offered by public sector, a number of private banks and rural and
co-operative banks (close to 250 member banks). Other networks, however, do not
include such small banks and thus, RuPay emerges as the unifier of a large
number of banks, thereby increasing the reach of the service.
· Acceptance Range – The RuPay cards
will be accepted at more than one million POS terminals, over 20,000 online
platforms. They can also be used at all Discover & Diner POS and ATM
branches on international waters.
These
are the primary points about RuPay card and its applications. If you are able
to understand these properly, you can conveniently attempt any questions
pertaining to this topic.
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