Centre plans to take RuPay to global level Mulls launching a RuPay credit card valid in India, abroad

Indian Military Veterans

Vibha Sharma
Tribune News Service

New Delhi, September 2
The Narendra Modi government is planning to take India’s payment gateway — RuPay — to the next level to give international networks such as Visa and MasterCard a real run for their money.

Sources in the BJP say the government is planning to make RuPay debit card operational on foreign shores and also along with it launch a RuPay credit card that would not only be valid in ATMs and shops in India but also abroad. “China has its own system and so does Russia. If India wants to become an economic force to reckon with, it needs to have its own internationally acceptable bankcard payment system,” a source said.

Sources say the aim is to promote domestic RuPay debit card as an alternative to MasterCard and Visa on the pattern of Chinese UnionPay card. This could help domestic banks and retailers cut down transaction costs by at least 50 per cent and save outflow of millions of dollars to overseas US-based companies.

Every time a customer uses a debit or a credit card, the company which owns it benefits by earning the transaction money.

According to a report by the Internet and Mobile Associations of India, about one-third of digital payments in India, estimated at $20 billion this year, are through debit cards, followed by 21 per cent through credit cards.

Unlike the MasterCard and Visa, who route all domestic transactions through overseas servers, RuPay uses local servers, bringing down the costs. Promoting a domestic bankcard payment network will save outflow of forex reserves and satisfy security concerns, sources say.

In the second step, the government plans to make its usage possible abroad. While it may not be easy to convert higher income group customers to RuPay, government sources say thousands of lower-income Indian workers who go abroad every year can make use of the facility.

Under the Jan Dhan Yojana, banks will open new bank accounts to cover unbanked households and issue RuPay debit cards for transactions. RuPay is issued by the National Payments Corporation of India, a company promoted by the RBI and local banks that will pay the premium from transactions on cards, to provide accidental insurance of Rs 1 lakh to account holders.