The National Payments Corp. of India later this year will launch a domestic payment card scheme that will compete with China UnionPay, Visa Inc. and MasterCard Worldwide for transaction volume in that country, a spokesperson for the state-owned company tells PaymentsSource.
First conceptualized in 2008 as one of the mandates behind the Indian government establishing the corporation, the domestic payment card, now called Rupay, has been delayed by more than three years because of operational and organizational issues (
The corporation officially renamed the payment card service, originally called IndiaPay, on March 21, the spokesperson says. It first will launch Rupay as a magnetic stripe card for no frills accountholders of at least four state-owned banks in the country, he says.
“As part of the financial-inclusion initiative adopted by the Reserve Bank of India, banks are working to provide no-frills accounts to the unbanked,” the spokesperson says. “These customers will be the first to get a Rupay-branded ATM card, which will only work on ATMs or biometric micro ATMs” in India.
In time, the corporation also will work with the 82 regional rural banks also operated by the state to launch Rupay-branded cards for their customers. “Debit and then credit cards will be launched perhaps in 2012,” the spokesperson says.
No details have yet been released about whether or when private-sector issuers will be able to support the national brand.
High transaction fees, typically around 5 rupees (10 U.S. cents or 7 euro cents), that Visa, MasterCard and other brands impose on Indian banks necessitated the need 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.
