India’s plans to have a domestic card-payment system will take another three years to roll out, an official from the National Payments Corp. of India tells PaymentsSource.
The Indian Banks Association and the Reserve Bank of India had confirmed plans to roll out a system called India Pay that would be similar to China UnionPay (
According to the official, the next task will be to implement the unique identification project, in which the Indian government to is attempting to give a unique identification number to all legal Indian citizens to combat identity fraud and illegal immigration.
To ensure payments from social-welfare schemes and remittances for the rural sector reach the right beneficiary, the authority in charge will establish a remittance system using the identification numbers allotted under the project.
“We do not see the IndiaPay system getting on the road then for at least the next three years,” he adds.
The driving force behind IndiaPay are the hefty fees Visa Inc. and MasterCard Worldwide charge Indian banks.
“My sources at the central bank tell me that Indian banks paid around 5 billion rupees (US$108 million or 70 million euros) in fees to Visa and MasterCard last year,” Mrinalini Manral, an analyst with India-based Dassler Business Intelligence, tells PaymentsSource. “Even [National Payments’] new ATM-switching fee of 1 rupee is less than the 4 to 5 rupee charge that the two card companies levy.”
