NPCI aims at financial inclusion: 74% of RuPay card-holders first-time users

Aiming at financial inclusion for all with India’s domestic card service RuPay, the National Payments Corporation of India (NPCI) said that as many as 170 million of its 230 million customer base were first-time card users.

“We already have as many as 596 members who are in the RuPay network, including national, international and state cooperative banks. We are now trying to get the district central cooperative banks (DCCB) also in the fold,” says A P Hota, managing director and CEO of NPCI.

RuPay also helps curb forex loss. For every transaction involving foreign card providers like Visa, MasterCard, American Express, there is the transaction fee on it going out of the country – an estimated 400 crore annually. “With a domestic card service system, there is a tremendous amount of money that India can retain,” says M Balachandran, chairman, NPCI.

Another advantage with using RuPay over international card providers for a consumer is when it comes to the merchant discount rate (MDR) – the rate charged by banks providing debit and credit card services to merchants. So normally a food bill of Rs 2,000 or a saree purchase of Rs 4,000 will result in a Rs 20-Rs 40 deducted as MDR.


“With RuPay, the advantage is that we charge a fixed rate. We charge 60 paise on the acquirer bank and 30 paise on the issuer bank – amounting to 90 paise per transaction. Normally debit card interchange is anywhere between 0.65 to 1%. Credit card interchanges could be 1%-2%. So with RuPay, there is lower costs to merchants, which is passed onto the card holder,” says NPCI’s Hota.

RuPay also has RuPay Platinum and RuPay international, in partnership with Diners’ Club and Discover Financial Services, that aims at catering to a wider audience. NPCI plans to launch RuPay credit cards by June.

“There is also the concern of data security. Why should so much sensitive financial information about the country be handled by overseas firms?” asks Balachandran.

Another aim is the creation of an autonomous financial system. Currently, Russia is struggling to launch its own domestic card payment network, after Visa and Mastercard stopped payment services in the country as part of the sanctions by the U.S. in the Ukrainian crisis.

 “Long before this, India had already realized the need for an independent domestic card network. The recent crisis only reinforces the good sense in having our own payment processes,” says Hota.