Monday, May 23, 2016

RuPay vs Mastercard and Visa and AmEx

 

RuPay Card vs MasterCard, Visa & AmEx

RuPay card is India's answer to the two most dominant market transaction processing players in the world Visa, MasterCard, AmEx owned by Visa Inc., MasterCard Inc. and American Express Co. respectively. India is now the sixth country in the world to have domestic payment gateway system. Other five countries are US, Japan, China, Singapore and Brazil.

Having our own domestic card payment network which helps in electronic money transfers will help both banks (between 200-250 member banks) and consumers in the following way:

  • Processing Fee: Since every transaction through RuPay will take place within India, the banks will have to pay less service charge to the payment gateway as compared to Visa, MasterCard and others. For e.g. If a person does a transaction of say Rs. 2,000 then banks will have to pay around  Rs.. 2.50 when RuPay is used whereas for the same transaction amount, Visa or Mastercard will charge Rs. 3.25. Technically speaking, transactions done through international cards is processed in foreign country which involves higher charge which helps in generating profit for Visa/MasterCard whereas RuPay transactions would happen domestically so charge would be less.
  • Faster transactions: Since processing would be down within India the transactions would be faster as compared to other cards.
  • International Acceptance: As of now RuPay card doesn't have international acceptance, whereas Visa or Mastercard have been in the market since many years and accepted by most of retailers online or offline such as Amazon, eBay, Walmart and others. Also National Payments Corp of India (NPCI) who promotes RuPay card is working hard to spread it's acceptance worldwide by partnering with Discover Financial Services and Japan Credit Bureau (JCB).
  • Quarterly Fee: In case of Visa and others banks have to pay a quarterly fee which won't be required in case of RuPay.
  • Card Type: Currently RuPay offers only debit card whereas Visa and MasterCard offers debit, credit and debit card. However RuPay credit card would be made available hopefully by March 2015.
  • Entry Fee: In case of international cards banks have to pay entry fee to be a part of their network which is not the case with RuPay card i.e. no joining fee for the banks.
  • Member Banks: RuPay card is offered by public sector, select private banks, rural and co-operative banks (total 200-250 member banks) whereas others don't include such small banks in their network. Checkout eligibility for getting RuPay card and withdrawal limit.

Latest news on RuPay (18Feb2015) – Very soon Virtual RuPay Card will be launched. Read more about IRCTC RuPay Pre-Paid Debit card which was launched on 24March2015 for online booking of railway tickets.

Also to increase it's spread recently Government of India launched Jan Dhan Scheme under which every account holder would receive RuPay debit card.  This will directly increase RuPay's use. Do you know about Sukanya Samriddhi Yojana for a girl child in which you get interest rate of 9.1%? Check out example of interest rate calculation: invest Rs. 10,000 every year and get Rs. 5,26,051 after 21 years.

Are you aware that – Indian banks now offer cardless withdrawal at ATM. i.e. no need for a recipient to have a ATM card to withdraw money

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