'Desi' alternative to VISA, Mastercard from July
Mumbai, Suresh Nandi, May 2, 2013, dhns: 22:29 IST
Come July this year, the National Payments Corporation of India (NPCI)'s RuPay debit card will go 'global' in a strategic tie-up with an American card issuer, Discover Financial Services (DFS) which will offer international acceptance of the card.
With this, RuPay will emerge as an alternative of international payment gateways like VISA or Mastercard and wants to make substantial difference in payment landscape.
In an interview to Deccan Herald, NPCI Managing Director & CEO A P Hota said both RuPay and the US firm DFS would stand to gain from this partnership due to extended distribution network of their respective cardholders. DFS is a banking and payments services firm that competes with payment companies such as Visa and MasterCard, even as it owns the card company Discover, Diners Club cards and Pulse ATM networks.
Unlike Visa and MasterCard, which partner banks to enable them issue cards with similar features, Discover adopts a philosophy of partnering local payment networks across the world, Hota pointed out.
“Also, the RuPay Card is leveraging upon EMV technology of Discover to issue global cards. Cards, terminal and host specifications for the RuPay global cards have already been released to the pilot-member banks. Issuance of RuPay global cards will commence in July with two banks,” he said.
Further, Hota said NPCI has spent over Rs 100 crore on RuPay card scheme infrastructure which is geared to serve all customer segments, across payment channels and form factors. RuPay, according to him, has clearly defined product roadmap keeping both domestic as well as international needs of prospective customers and banks.
Under the strategic alliance, Hota added, NPCI and DFS have already announced operationalisation of acceptance of Discover and Diners’ Club cards in India on NPCI’s NFS (National Financial Switch) network. Accordingly, Discover and Diners Club cards now are accepted at over 85,000 DFS ATMs across the country, NPCI chief said. In the coming months, RuPay global cards will be issued and accepted on the Discover, Diners Club International and PULSE networks for international purchases and cash access outside India. This will be followed by the acceptance of Discover and Diners Club cards access at point-of-sale (PoS) terminals for purchases in the country.
NPCI started its services providing cheaper access to third-party ATMs by setting up a network with very low transaction charges coupled with strong support from the Reserve Bank of India. Giving a macro perspective, Botha said, so far 25 commercial banks, 25 regional rural banks, and 30 urban co-operative banks have issued over 1.5 million RuPay cards. From readiness perspective, all the ATMs in the country are integrated with RuPay.
On financial data, Hota said the project was initially conceived by the RBI and was taken forward for implementation by Indian Banks Association in March 2012.
"We would be able to break-even in this project in five years from when we commenced, which is by financial year 2017-18." NPCI Board is headed by Infosys Technologies' emeritus chairman N R Narayanamurthy with nominees drawn from RBI and 10 core promoter banks -- State Bank of India, Bank of India, Bank of Baroda, Canara Bank, Punjab National Bank, ICICI Bank, HDFC Bank, Citibank, HSBC.