Rupay on way to counter Visa and Mastercard

formal banking sector, the NPCI (National Payments Corportation of India) was set up by the RBI to create a homegrown payment and settlement infrastructure in India and to function as a “not-for-profit” company. The aim of the government was also to promote Rupay’s usage since long in a bid to give a boost to the domestic card network and has also equated usage of Rupay to nationalism and supporting the nation.

By March 2017, India had 700 plus Rupay issuing banks and 40 plus Rupay acquiring banks. The growth of Rupay was witnessing an upward trend from there on and by July 2018, Rupay cards witnessed 260 plus million transactions in a month.

The Rupay card payment system was launched by the NPCI to offer a domestic, open-loop, multilateral system which will allow all Indian banks and financial institutions in India to participate in electronic payments. The Rupay card has been designed in three different segments—classic, Platinum and Select variant cards to cater to different categories of customers.

As on 31 December last year, more than 68 crore Rupay cards have been issued to Indian customers from various banks across the country and out of these 68 crore, approximately 31 crore Rupay debit cards have been issued to account holders under the Pradhan Mantri Jan Dhan Yojana scheme, which also provides an accidental cover of Rs 2 lakh along with the card to each card holder.

In Russia, Visa and Mastercard

held over 90% of the total cards in the country and Visa and Mastercard had 4% of their total revenue from Russia. For India as well, Visa and Mastercard dominated the country’s debit card space for many years. Visa cards account for 44% of the card market share in India and Mastercard accounts for 36% of the total market share.

This is seeing a drop in the country with the penetration of the indigenous Rupay cards. Union Finance Minister Nirmala Sitharaman herself is asking banks to issue Rupay cards as a priority. Banks are also being incentivised in India to issue Rupay cards by the government by providing merchants and customers subsidy and levying zero charges on transaction, unlike the Visa and Mastercard.

To give a further push to the indigenous digital payment ecosystem in India and stop the country’s dependence on digital foreign payment infrastructure, the Modi government under the NPCI developed the UPI (Unified Payments Interface) payment system in April 2016 which has been touted as one of the best initiatives taken under digital payment infrastructure in the country.

UPI is an innovative payment solutions system that powers multiple bank accounts into a single mobile application (of any participating bank), merging several banking features, seamless fund routing and merchant payments into one hood. It also caters to the “Peer to Peer” collect request which can be scheduled and paid as per requirement and convenience.

UPI is also an easy to use, single mobile application that can link all your bank accounts for easy access and help provide immediate funds transfer through mobile devices round the clock and 365 days. The homegrown UPI system has been praised across the globe for its convenience, safety and round the clock banking facility.

In the last five years, UPI has grown manifold in India as it helped ease banking solutions for millions of customers in the country as it provides the facility of quick and easy payments from multiple bank accounts in a single mobile application. As of January 2022, UPI has recorded 461.71 crore digital payment transactions with the value of Rs. 8.31 lakh crore, making it the preferred mode of payment for Indian citizens.