NEW DELHI | India now has its own payment gateway called RuPay. Launched two weeks ago, the RuPay payment gateway has been set up by the National Payments Corporation of India (NPCI) to facilitate and boost electronic payments and commerce. The gateway will support ATM withdrawals, payments at merchant outlets and online purchases. Dedicating it to the nation, president Mukherjee said India is one of the few countries in the world to have its own card payment gateway.
Context: the National Payments Corporation of India
In 2005, the Reserve Bank of India proposed to set up an umbrella institution for all retail payment systems in the country. The core objective was to consolidate and integrate multiple payment systems into one nation-wide uniform and standard payment platform. The other objectives were to facilitate an affordable payment mechanism to benefit the common man across the country and help financial inclusion.
This led to the formation of National Payments Corporation of India, (NPCI). The NPCI currently consists of ten core promotor banks, including State Bank of India, Punjab National Bank, ICICI Bank, Citibank and HSBC. The NPCI's products include a National Financial Switch, Clearing House and RuPay, a new domestic card payment scheme.
RuPay: the debit card of India
RuPay, the coinage of the two terms Rupee and Payment, is the brand name for a relatively new Indian debit card scheme. 'RuPay' strives to provide a domestic payment system open to all Indian banks and financial institutions in India to offer electronic payments to consumers and businesses. The rationale behind RuPay is that domestic processing will keep payment costs low, allowing banks to tap into the unbanked, drive commerce, and maintain control over personal and transaction data as it remains within Indian borders. Last year, RuPay already crossed three million cards within two years of its launch and RuPay debit cards are issued by 238 banks.
RuPay PaySecure enabling Rupay ecommerce payments
RuPay Debit Cards can already be used for online transactions through RuPay PaySecure, the eCommerce solution of the NPCI. To be able to buy online, every customer needs to be registered with PaySecure. Consumers will be authenticated by their issuing bank using methods like One-Time-Password or challenge questions to become registered. For example, the consumer needs to pick an image and to enter a phrase to register his or her RuPay card. In subsequent transactions, the online shopper will have to identify the correct registered image and acknowledge the phrase along with the last three online transactions. At this moment there are 26 RuPay acquiring banks helping businesses to accept RuPay payments online.
The NPCI wants to take the RuPay card overseas and is already talking with Discover Financial Services (Discover Card, Diners Club International) in the US and JCB in Japan for future expansion. Already back in 2012, Discover and NPCI entered into a strategic alliance allowing Discover Cards and Diners Club cards to be used within India, and, to allow RuPay cardholders to use the Discover/Diners network for international purchases outside of India. Whether the agreement is also to allow Indian online shoppers to use their Discover or Diners Club branded RuPay card for cross-border ecommerce transactions is not clear at this moment in time.