Issue RuPay debit cards to customers, install POS terminals: Govt to PSU banks
In a bid to promote indigenous payment system RuPay, the government has asked state-owned banks to issue RuPay debit cards to customers. They have also been told to “encourage” merchant establishments to install Point of Sale (PoS) terminals for RuPay cards.
Although banks have not been directed to refrain from issuing cards where transactions are processed by Visa or MasterCard, there is a clear direction to push RuPay. As a general rule, customers are issued a single debit card per account. Now, banks will have to pursue the unconventional practice and possibly adjust systems to issue two debit cards to a client who insists on a Visa or MasterCard that currently have wider acceptance than RuPay.
Within the next six months banks will have to offer the new debit card to current customers, inform thousands of branches and submit progress report to the ministry every quarter. Promoting indigenous retail payment networks is not unusual for countries and governments. Countries such as Singapore and Brazil have their local payment companies while China forbids foreign payment companies to process domestic card transactions.
RuPay was launched by National Payments Corp of India (NPCI), established to function as a cost-effective payment services entity. Indian government’s current step is likely to worry MNCs payment platform providers such as Visa and MasterCard. Every year around Rs 80,000 crore worth of debit card spends happen in India, of which 5% are cross-border transactions. It’s a market that’s flourishing at around 35% every year.
Categories: India Current Affairs 2017