RuPay is India’s indigenous card scheme created by the National Payments Corporation of India.It was conceived to fulfill RBI’s vision to offer a domestic, open-loop, multilateral system which will allow all Indian banks and financial institutions in India to participate in electronic payments.It is made in India, for every Indian to take them towards a “less cash” society.
RuPay is a homegrown card payment scheme launched by Reserve Bank of India-backed National Payments Corporation of India (NPCI). RuPay, the name being a portmanteau of “rupee” and “payment”, has been heavily promoted by the government. The seven-year old card system competes against global payment network firms like MasterCard and Visa. The card broadly comes in five variants. One such variant, RuPay Contactless card, acts as a national common mobility card, allowing users to pay for bus and metro charges besides making payments for toll and parking. It can be used at ATMs as well as for online payments.
Why is RuPay gaining prominence?
The idea of RuPay was devised to promote the use of electronic payments as well as to expand the idea of financial inclusion. The prime minister’s flagship scheme for financial inclusion to provide affordable basic banking services, the Jan Dhan Yojana, gave impetus to the payment scheme as its debit cards were issued to every account opened under the scheme. It moved towards capturing close to 60% of the market in terms of issuance of cards. Besides, RuPay is cheaper and more affordable compared to foreign company cards such as MasterCard and Visa, as its transactions are processed domestically.
RuPay card has a very limited international presence, even as it has tied up with global payments networks like Discover, Diners Club International, PULSE and others to help customers make international purchases and withdraw cash outside India. People travelling abroad tend to prefer Visa, MasterCard and American Express due to their higher acceptance and comfort built over the years. Typical users of cards are still shy of using RuPay due to factors like lack of awareness and brand appeal.
The Centre and RBI have been trying to promote digital transactions. NPCI, banks and the Centre will widen and deepen the usage of RuPay to enhance its brand value globally, according to RBI’s vision for the next three years. To ease remittances into India and help Indian travellers make payments overseas, a Nandan Nilekani-led expert panel on digital payments recommended NPCI to prepare an international-ization plan for Indian payment systems such as RuPay and BHIM unified payments interface.
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