RuPay is the National Payments Corporation of India’s indigenous card scheme. It was designed to realise the RBI’s vision of providing a domestic, open-loop, multilateral system that will enable all Indian banks and financial institutions in India to participate in electronic payments. It is made in India for all Indians to help them transition to a “less cash” society.
Visa and MasterCard, on the other hand, are both American companies that are widely accepted and used card networks around the world. There are other card networks as well, such as American Express, Amex, Citi, and so on, but you get the idea. These are international credit card companies.
The RuPay Card is India’s answer to the MasterCard and Visa credit cards. RuPay from India competes with widely used Visa, AmEx, and other payment methods that have dominated the online shopping marketplace over the last decade, including India. While the number of cards issued is large, RuPay is still smaller than its international competitors in terms of market volume and value.
In a huge market like India, the increase in RuPay cards issued is a setback for established card networks like Visa and MasterCard, which had previously led the game. Both card networks are bothered by the fact that the Indian government is encouraging the use of RuPay cards, which is reflected in the numbers.
The government issues only RuPay debit cards to new account holders under the Pradhan Mantri Jan Dhan Yojana (PMJDY), which was launched in 2014. This is the most significant step forward for RuPay in terms of automatically lending a fair share of the debit card market to the NPCI card network.
“International card companies (such as Visa and MasterCard) have been complaining since RuPay was integrated into PMJDY. “I am confident that if these international card players had released credible and relevant products on financial inclusion, they, too, would have been included in the PMJDY,” Hota said.
RuPay, like the Unified Payments Interface (UPI), is subject to the Indian government’s Zero-MDR policy, which means that merchants cannot be charged fees for transactions on these networks.
Furthermore, when banks use RuPay instead of global networks, their operating costs are lower. Banks that issue MasterCard and Visa cards must pay a quarterly fee to be a part of their network. However, because RuPay is a domestic network, banks are not required to pay this fee, so no processing or transaction fees are passed on to customers.
