Home / Industry / Banking /  Will RuPay repeat its debit card success in the credit card space?

MUMBAI : Retail payments umbrella entity National Payments Corp. of India (NPCI) aims to scale up credit cards on homegrown card network RuPay to emulate the volumes it has in the debit card space, said Praveena Rai, chief operating officer.

“On credit cards, the real thrust started last year. Given that we are moving into the credit card space, this is a base that would build up over time," Rai said in an interview after announcing a partnership with Bank of Baroda’s credit card division BoB Financial Solutions Ltd (BFSL).

At present, there are a “few million" RuPay credit cards in India and 10-15% of new credit cards being issued are on the domestic card network, in a sign that there is growing acceptance among issuers and consumers, Rai said. NPCI plans to expand its partnerships to all card issuers.

RuPay’s debit cards got a massive thrust from being associated with the Pradhan Mantri Jan Dhan Yojana (PMJDY) scheme, India’s flagship financial inclusion programme. As of 10 November, banks have issued 317.2 million RuPay debit cards to beneficiaries.

“Yes, there was a big push from Jan Dhan and that gave a fillip to RuPay in the early days. We have 1,100 banks in the country that issue RuPay cards, right from the largest players to the smallest ones across the entire segment. The objective of NPCI has always been to create citizen-scale infrastructure and provide citizen-scale services. That same philosophy will extend to credit cards," Rai said.

RuPay has established itself firmly in the debit card space and the prepaid card space and is now gaining significant momentum and creating a presence in the credit card space, she said.

“As we have our issuances and market share increasing, a key objective is having all the key issuers of credit cards live on the platform," Rai said.

Rai said she does not believe there are deficiencies in the RuPay platform when it comes to international usage.

“There is a requirement for users to enable their cards for international usage. In fact, wherever we find failures, we realize that customer awareness is one of the challenges," she said.

To that extent, the tie-up with BFSL (earlier known as BoBcards Ltd) gives RuPay access to a company focused on credit cards, backed by a large public sector bank with a sizeable customer base.

Having entered India’s credit card market in 1994, four years before SBI Card was launched, BFSL has lagged its peer and other lenders in card issuances.

“We arrived too early. We arrived when there was no Cibil (credit bureau). We were very aggressive when the ecosystem for the Indian context was not prepared for a credit card-like product. There was a huge default and the management took a call to press the pause button," said Shailendra Singh, managing director and chief executive of BFSL.

The real thrust started around 2018 when the base was 125,000 cards and in three years, it is more than 700,000 credit cards, Singh said. In another two years, BFSL should be among the top 10 issuers of credit cards, he said.

“If you look at new issuances, we are among the top five. Last two-three years, we have invested a lot on technology, internal processes, capacity building and very recently on-boarded the best-in-class credit card processing platform Vision Plus. All these empowers us to get into the market more aggressively," he added.


Shayan Ghosh

Shayan Ghosh is a national writer at Mint reporting on traditional banks and shadow banks. He has over a decade of experience in financial journalism. Based in Mint’s Mumbai bureau since 2018, he tracks interest rate movements and its impact on companies and the broader economy. His interests also include the distressed debt market, especially as India’s bankruptcy law attempts recoveries of billions worth of toxic assets.
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