Making a case for wider acceptance of RuPay cards

NPCI is working to create an acceptance ecosystem at merchant outlets in remote parts of the country


RuPay is a card payment settlement system that competes with Visa and MasterCard. Photo: Reuters
RuPay is a card payment settlement system that competes with Visa and MasterCard. Photo: Reuters

The National Payments Corp. of India (NPCI), promoter of the RuPay payment settlement system, is looking for ways to increase the acceptance infrastructure of the debit cards issued under the system.

NPCI is working to create an acceptance ecosystem at merchant outlets in remote parts of the country, and also trying to enable micro-automated teller machines to accept these cards.

It was set up as an umbrella institution for all retail payment systems and to facilitate an affordable payment mechanism in association with State Bank of India, Punjab National Bank, ICICI Bank Ltd and HDFC Bank Ltd, to name a few.

“We are looking at various solutions to find synergies for RuPay cards. There is a need to promote an acceptance structure,” said A.P. Hota, CEO and managing director, NPCI.

RuPay is a card payment settlement system that competes with Visa and MasterCard. Since its launch in March 2012, until August 2014, 35 million such cards had been issued.

The launch of the Pradhan Mantri Jan-Dhan Yojana (PMJDY), under which Aadhaar-linked bank accounts were opened for the unbanked, mai-nly for direct transfer of benefits, gave the system a boost and by May the number of RuPay cards touched 170 million.

“Accounts have been opened, cards issued and many are also receiving subsidies in these accounts. But where does one go to withdraw money or utlilize the card? There are limited facilities in rural areas,” said Hota.

Following US President Barack Obama’s visit to India in January, when he lauded the PMJDY scheme, the US Agency for International Development (USAID) entered into a collaboration with NPCI and the finance ministry to do on-field studies in India to gauge the type of card acceptance mechanism suitable for merchants as well as consumers in rural areas. For this, USAID partnered with companies such as Axis Bank Ltd, Bharti Airtel Ltd, Citibank NA, Coca-Cola Co., ICICI Bank Ltd, ITC Ltd and Marico Ltd, among others.

“We are also conducting primary qualitative and quantitative research with merchants and consumers to better understand their preferences as it relates to digital payments at point of sale,” USAID said. The agency intends to release the results in a collective action plan that the members of the partnership will take up.

“We are talking (to USAID) because they have already done experiments in places even worse than India,” said a finance ministry official who did not want to be named.

Additionally, NPCI is making efforts to increase acceptance of RuPay cards in micro-ATMs.