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RuPay to tap premium customers as banks renew deals with Visa, Mastercard

RuPay has 42% of total debit cards; yet it contributes only 16% of full PoS, e-commerce transactions

Alnoor Peermohamed  |  Bengaluru 

RuPay to tap premium customers as banks renew deals with Visa, Mastercard

The National Payments Corporation of India (NPCI) is looking at increased uptake of its debit cards among premium customers, as deals signed between and its global competitors and expire over the next few years.

Though controls 42 per cent of the Indian market, the share of its cards is only 16 per cent of total (PoS) and This is largely due to the fact that the majority of cards — around 220 million— are held by benefactors of the Jan Dhan Yojana scheme.

"and are international companies, they have deep pockets. At the time of the launch of the debit card, they had signed three to five year deals with Once these deals expire, and have an opportunity to change their portfolio, they might consider RuPay," said A P Hota, Managing Director and Chief Executive Officer (CEO) of

was launched around five years ago, designed as a local payment mechanism and as an alternative to and

has already signed up over 750 banks, including cooperative and regional rural (RRBs), in the country, far larger than the 50 odd top and used to cater, prior to the RuPay's entry. Despite this deep penetration, top in the country continue to issue and debit cards instead of cards.

Hota says the deals signed between and and Visa stops them from issuing cards despite the NPCI's charges being one-third of what the two global firms charge on every transaction. Though allow customers to choose the card provider they want, they often end up picking either of the global providers' cards due to lack of awareness.

"is a sponsor for the Olympics. is the co-sponsor of the Mumbai Indians IPL (Indian Premier League) team. We are just a small startup in comparison, a not for profit entity. It will take time for us to really build our muscles," added Hota. "We've been around for just five years, they've been around for five decades."

While the government wants to promote and in a big way to save on the foreign exchange that comes from the charges of and on every transaction, it understands this will take time. For its ambitious goal of reaching 25 billion electronic transactions in the current financial year (FY), it has set a mandate for Visa, and AMEX to grow their number of transactions from 3.2 billion last year to 8 billion this year.

For RuPay, the mandate is far smaller, with the government expecting the domestic card network to do 3 billion transactions in the current FY. However, the expectation of growth is far higher, over eight times to be precise when comparing the 370 million transactions did in the previous FY.

First Published: Wed, July 12 2017. 01:02 IST