RuPay debit cards to gain from small finance banks

It is set to emerge as the dominant player in debit cards issuance

RuPay is set to emerge as the dominant debit card with small finance banks set to start operations soon.

Till March 30, 178 million RuPay debit cards had been issued under the Jan Dhan Yojana against 662 million debit cards issued by the banking industry, according to the Reserve Bank of India. 

The National Payment Corporation of India (NPCI) has held consultations with small finance bank licensees on the use of RuPay cards.

“We had several meetings on the issue of RuPay with the NPCI, which has come out with innovative products like a unified payment interface,” said K Paul Thomas, chairman and managing director, ESAF Microfinance.

“The certification fee for RuPay is almost half of that charged by other service providers. Also, the timeline for launch of a RuPay debit card is much shorter,” said an industry expert.

According to the NPCI, RuPay card use at points of sale increased from 5.25 million transactions worth Rs 1,100 crore in 2014-15 to 18.62 million transactions worth Rs 2688 crore in April-July 2016.

But, because of their small size RuPay’s point-of-sale debit card transactions were worth Rs 4,474 crore 2015-16, a fraction of the Rs 158,927 crore debit card transactions in the country.

“One of the advantages of the RuPay debit card is that the data will remain on Indian servers. It also cost-effective for banks,” said Rajeev Yadav, chief executive officer, Disha Microfin.

“RuPay is accepted at all ATMs in India,” said R Baskar Babu, chief executive officer at Suryoday Micro Finance.

Capital Small Finance Bank, India’s first small finance bank that started operations in April, has issued 80,000 RuPay debit cards. It recently launched the RuPay Platinum card.

Kolkata-based Bandhan bank has issued 7.7 million RuPay debit cards till the end of March 2016, according to Religare.