India's National Payments To Add Merchant Acceptance To RuPay Debit Card

Published February 07, 2012, 5:08 p.m. EST

Updated February 07, 2012, 4:08 p.m. EST

1 Min Read

India’s top payments authority says it plans to launch chip-and-PIN RuPay debit cards in the country by March 25 as part of expanding the card brand’s reach. The product also will include point-of-sale acceptance; earlier versions were usable only at ATMs.

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Partner banks will join National Payments Corp. in the launch, a spokesperson for the payments authority tells PaymentsSource.

The debit card launch comes a year after National Payments launched the domestic payment card scheme to compete with Visa Inc. and MasterCard Worldwide for transaction volume in India (see story).

Since then, smaller banks such as the Maharashtra-based cooperative Gopinath Patil Partik Janata Sahkari Bank and regional rural bank Kashi Gomti Samyut Gramin Bank have launched RuPay ATM card programs (see story).

Next month’s launch will be the first RuPay debit card program launched by any bank, the spokesperson says, noting Bank of India Ltd. launched a similar card, but it uses India’s biometric identification scheme for authorization on payments instead of PINs (see story).

Though the spokesperson did not disclose any partnership agreements, local newspaper Mint reports that the authority was is talks with such large banks as ICICI Bank Ltd., HDFC Bank Ltd. and IDBI Bank Ltd. to issue RuPay-branded debit cards as well as to forge acquiring partnerships.

“What I can confirm is that our founding member banks would probably be on board first [for launching the card],” he says, pointing to National Payments’ promoter banks such as State Bank of India Ltd., Bank of India Ltd. and Canara Bank Ltd.

National Payments launched Rupay as a riposte to international card brands, much like China did with China UnionPay. International brands such as Visa and MasterCard charged acquirers high transaction fees, typically about 5 rupees (10 U.S. cents or 7 euro cents) per card transaction. National Payments will charge about one-third less than that, the spokesperson adds.

Banks that support Rupay will pay National Payments 0.8 rupees per ATM transaction routed through the National Financial Switch of India, which the payments corporation maintains.

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