RBI aims to bring RuPay on par with global card rivals
India's central bank, the RBI, is taking steps to boost the international presence of its domestic RuPay card, which has over 672 million debit card users, by allowing the issuance of foreign currency cards, including prepaid forex cards. Experts say the move will increase acceptance of RuPay overseas, allow corporates and individuals to use the cards abroad, and position it alongside global payment networks like Mastercard and Visa. The RBI also approved the use of RuPay credit cards on UPI, a facility its rivals don't have access to so far. Bhutan, Singapore, UAE and Nepal have already operationalized RuPay cards.
PremiumMUMBAI : The Reserve Bank of India (RBI) has initiated steps to gradually bring the homegrown RuPay card on par with global card networks such as Visa and Mastercard.
Launched in 2014, RuPay cards are issued by more than 1,100 banks including state-owned lenders, private banks, regional rural and cooperative banks, as per its website. There are about 672 million RuPay debit cards, according to industry estimates. Details on the credit card base is unavailable.
RBI’s latest step is to let RuPay issue foreign currency cards, so far available only to rival card networks. Experts have termed this as an attempt by the central bank to internationalize RuPay. On Thursday, the regulator allowed issuance of RuPay prepaid forex cards by banks in India for use at ATMs, point of sale (PoS) machines and online merchants overseas. In June 2022, RBI approved the use of RuPay credit cards on UPI (unified payments interface), a facility its rivals don’t have access to so far.
Experts said issuance of forex cards would increase the acceptance of RuPay overseas and allow corporates and individuals to use these cards during travel abroad.
“The decision to internationalize the issuance and acceptance of RuPay, coupled with the permission for banks to issue RuPay prepaid forex cards, will position RuPay alongside leading global payment networks like Mastercard and Visa," said Gurjodhpal Singh, chief executive officer (CEO) of digital business financial platform Tide (India).
He said RBI’s decision creates new opportunities for RuPay in the global market, strengthening its position as a preferred payment option for a wider range of users.
Bhutan, Singapore and the United Arab Emirates and Nepal have already operationalized RuPay cards, PTI said in a report in April 2022.
According to Akash Sinha, co-founder and CEO, Cashfree Payments, RuPay cards acceptance by Bhutan, Singapore, Nepal, and UAE strengthened push for more cross-bo-rder payment partnerships and expanded UPI and RuPay’s global reach.
“It also built trust for further collaborations, fostering seamless cross-border transactions and promoting financial inclusivity globally," he said.
Others said RuPay has been able to establish itself as a credible alternative to Visa and Mastercard and allowing it to issue forex cards would give the product more impetus.
Adhil Shetty, CEO of financial services marketplace Bankbazaar, said over the years, the acceptance of RuPay cards have expanded significantly, gaining acceptance at many international locations as well.
“RuPay cards were designed to cater to the specific needs and preferences of Indian consumers. With the introduction of RuPay Prepaid Forex cards, payment options for Indians travelling abroad have further expanded," said Shetty.
Financial sector watchers also said RBI’s decision is significant in terms of cross-border transactions.
“By embracing digital advancements and leveraging potential of RuPay prepaid forex cards, financial institutions are poised to revolutionize international payments landscape, fostering a more streamlined and interconnected global economy," Rajsri Rengan, India head of development, banking and payments, at fintech firm FIS, said.
By enabling smoother transactions, Rengan said, businesses can expand their reach and unlock new growth opportunities, while individuals can enjoy the benefits of simplified international travel, online purchases, and remittances.
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