NPCI introduces RuPay to Indian eCommerce: CCAvenue processes first transaction
The meteoric rise of the Indian eCommerce industry in the past decade has induced the establishment of a domestic card payment network in the country. NPCI (National Payments Corporation of India), an umbrella institute set up by the RBI, has launched RuPay for the eCommerce space.
RuPay has been promoted by ten of the leading domestic Banks - The State Bank of India, Punjab National Bank, Canara Bank, Bank of Baroda, Union Bank of India, Bank of India, ICICI Bank, HDFC Bank, Citibank and HSBC. It was mainly set up to compete with Visa Inc. and Mastercard Inc., the international card schemes. The Indian Corporate Affairs Minister, Mr. M. Veerappa Moily, has declared that all state-owned banks will join this new retail system by the end of this year.
Initially, RuPay will process only Debit and ATM cards through the National Switch set up by NPCI. By the end of 2014, RuPay will also venture into credit card issuance to widen its customer reach considerably. Presently, more than 3 million Rupay debit cards have been issued in the Indian Market, but this number is expected to reach 150 million by the end of this year.
Moreover, NPCI has entered into a strategic partnership with Discover Financial Services (DFS) to target a global audience. This move allows RuPay Global Cards to be accepted on Discover’s global payment network outside India. Its Chinese equivalent, the China UnionPay card, has a card base of 1.8 billion and is now accepted in 26 countries. Also, NPCI has already approached regional rural banks, urban co-operative banks and other banks that have not been offering any type of payment cards so far.
The first online transaction through a RuPay Card has now been made on FutureBazaar, by Deputy Governor of RBI Mr. H R Khan and A. P. Hota, Managing Director & CEO, NPCI, at an event in Mumbai while officially launching RuPay’s eCommerce-friendly cards. Merchants using CCAvenue’s services would be able to collect payments through RuPay Debit cards along with Master/Visa Credit Debit cards.
RuPay is perceived aiming to fulfill RBI’s vision of offering an Indian, open-loop, multilateral system that will allow all Indian banks and financial institutions to participate in electronic payments. Within two years of launch, NPCI has issued over 3 million RuPay cards as of end March. Going further the NPCI is planning to increase the issuance of the RuPay cards to more than treble i.e. over 10 million by the end of FY14. These numbers translate to the huge potential customer-base in the tier 2 and tier 3 cites that were not able to transact due to no access to payment option.
Chief Marketing Officer, Avenues India, Mr. Mohan Nair states, all the regional rural banks, urban co-operative banks, and smaller banks can now be part of the eCommerce ecosystem. The number of buyers would increase substantially from the tier 3 and tier 4 cities where people would be keen to purchase products/brands that are not easily available locally. To top it, the major banks are heavily promoting RuPay Cards due to the low processing charges involved. This is indeed good news for Indian eCommerce.
Website: RuPay Roadmap
Disclaimer: CCAvenue is an advertiser with YourStory