Jan Dhan Yojana opens a new door for RuPay gateway

MUMBAI (TIP): As Pradhan Mantri Jan-Dhan Yojana (PMJDY), the financial inclusion scheme launched by Prime Minister Narendra Modi late last month notches up impressive numbers and expects to meet its 7.5 crore accounts target well within 100 days, payment gateway RuPay is experiencing a boost in fortunes.

Payment gateways are platforms that help banks facilitate electronic money transfers. India is only the fourth country in the world after the US, Japan and China to have its own national payment gateway, in RuPay. With the PMJDY getting nearly 2.5 crore new bank accounts within seven days of launch, each account holder gets a RuPay debit card along with his/her account.

As a result, RuPay is notching up numbers. According to the National Payments Corporation of India (NPCI), which developed the platform, the RuPay card has a current base of 2.5 crore users and is seeing about seven lakh inter-bank transactions a day. With the financial inclusion scheme coming into play, the total number of RuPay card holders is likely to surge.

NPCI will declare official numbers at the end of this quarter. AP Hota, Managing Director and CEO of National Payments Corporation of India Ltd (NPCI), said that the target for the year-end was six crore cards. By March 2015, RuPay may be able to add an additional 10 crore accounts. If the Center’s financial inclusion scheme lives up to its hype, the sheer number of RuPay cards in the country will create a critical mass that will help create a huge network of retailers who accept RuPay cards.

According to Reserve Bank of India statistics, the total number of credit cards in India is currently at around 1.9 crore while the number of debit cards issued is at 40 crore. Currently, global organizations such as Visa and MasterCard dominate this space. But Hota says competing with MasterCard and Visa is not a priority. “The perceived competition with MasterCard and Visa is not relevant at this stage. They are global companies with trillion-dollar revenues and deep pockets.

We are a small company with INR 100- crore capital,” he said. The main challenges for RuPay are to get acceptance among the high-income bracket and to increase the number of transactions among those in the lower income bracket. Partner banks have an incentive to push RuPay to customers as transaction costs through this gateway are expected to be at least 40 per cent lower than through Visa and MasterCard.

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