Signaling to Visa Inc. and MasterCard Worldwide that they no longer are the lone payment card networks in India, the National Payments Corp. of India has joined with Bank of India to launch RuPay-branded debit cards.
This is a significant step in the evolution of Rupay, India’s domestic credit and debit card scheme because the deal is the first in which the payments authority is working with a mainstream commercial bank to issue the debit card.
Previously, the payments authority had reached deals with only an urban cooperative bank and a regional rural bank in the country to issue Rupay-branded ATM cards (
Bank of India is initially are providing the cards to holders of “no frills” accounts who also have an Aadhaar number in one district in the state of Maharashtra, a spokesperson for the payments authority told PaymentsSource in an interview. The payments authority decided to link Rupay with the country’s Aadhaar resident-identification program in April (
Under Aadhaar, the Unique Identification Authority of India will provide every resident of the country an identification number ascertained from fingerprint, facial recognition and iris scans. The authority will issue the ID number to all residents of the country, and consumers’ Aadhaar fingerprint information would be their banking passwords.
“Rupay cardholders will be able to withdraw cash from ATMs as well as from micro-ATMs, which are hand-held devices that the bank’s business correspondents will carry,” the spokesperson added. “The cardholder will have to provide the Aadhaar number as well as his fingerprint or biometric identification to withdraw cash at the micro-ATMs.”
Merchant payments initiated with the cards will not be possible until the payments authority establishes an acceptance infrastructure for RuPay cards. It expects to complete that task within six months, according to the spokesperson.
National Payments designed RuPay to be a payment card scheme to compete with Visa and MasterCard for transactions initiated domestically (
High transaction fees, typically about 5 rupees (10 U.S. cents or 7 euro cents), that Visa, MasterCard and other brands impose on Indian banks necessitated the effort to establish a domestic brand.
Banks that support Rupay will pay National Payments a much lesser fee of 0.8 rupees for ATM transactions routed through the National Financial Switch of India, which the payments corporation maintains.
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