Intro: It is comparatively a more cost effective online payment gateway and card scheme for India.
The RuPay system started by National Payments Corporation of India (NPCI) is a comparatively more cost effective online payment gateway and card scheme for India.
RuPay facilitates electronic payment at all Indian banks and financial institutions, and competes with MasterCard and Visa in India. Even international acceptance is there, as the NPCI is maintaining ties with Discover Financial to enable use of RuPay powered cards for international transactions. The RuPay card is currently capable of offering complete inter-operability between various payments channels and products. As of now NPCI offers varied solutions across platforms including ATMs, mobile technology, cheques, etc.
According to A P Hota, Managing Director and CEO of NPCI, the card base is growing at the rate of 2.5 million per month. The total number of cards issued is more than 17 million.
Recently the Finance Ministry has decided to limit Aadhaar’s role in its welfare scheme payments and, instead, use ATM-enabled RuPay cards for last-mile authentication to withdraw money. Aadhaar will still be used for opening accounts and eliminate ghosts and duplicates from the list of beneficiaries, but the final payments to those beneficiaries who are found eligible for the welfare scheme will be done through RuPay. The Finance Ministry will soon announce a financial inclusion scheme under which RuPay ATM cards with bank accounts will be given to deserving beneficiaries.
RuPay, being a fully developed online payment gateway and card scheme, is clearly much more advantageous than the system of making payments through the Aadhaar based system. With RuPay, the beneficiaries are not restricted to any particular technology platform; they can conduct transactions on multiple platforms. Selection of RuPay also means that the authentication will be PIN based. This is certainly an improvement on the biometric authentication that UIDAI was providing. Several reports from field have proved that the online biometric authentication is not working for manual labourers and the old.
The problems were also caused because the Business Correspondents (BCs) were at times using technologies for biometric identification that were different from the ones mandated by UIDAI.
The government has asked public sector banks to issue RuPay debit card for every new bank account and Rs 5,000 overdraft facility under its financial inclusion plan.
Under the plan being prepared by the Indian Banks Association (IBA) two adults in every household will be provided bank accounts with an overdraft facility of Rs 5,000 as well as a RuPay debit card with a personal accident insurance cover of Rs 1 lakh.
The RuPay system is expected to have a major impact on the way by which the ordinary citizens in the country, especially those living in the rural areas and smaller towns, conduct their transactions. The Finance Ministry has prepared a time-bound action plan under which about 12 crore accounts in rural areas and 3 crore in urban areas will be opened and about 50,000 new Business Correspondents will be engaged in rural areas.
The RuPay cards will be issued to each of the new accountholders. Many banks in India are keen to use the RuPay system as it is expected to bring down the costs. More than 150 cooperative banks and the Regional Rural Banks (RRBs) in the country have also issued RuPay ATM cards.
–Anoop Verma
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