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38% of debit cards issued in India are on RuPay card network: report


Thirty eight percent of all debit cards issued in India are on the RuPay card network, according to a report by JM Financial Services (download pdf).

The report added that 645 million debit cards are in circulation in India as of January 2016 and RuPay’s share among them was 247 million cards. RuPay was able to increase its share exponentially among other card networks (Visa and MasterCard) due to the Jan Dhan Yojana, the financial inclusion programme launched by the Prime Minister Narendra Modi in 2014.

JM Financial also added that RuPay cards have managed to get a 18% share in terms of volume of debit card transactions. Although, the transactions occurred primarily at ATMs (20.4%), followed by POS terminals (4.1%) and online transactions (1.6%).

RuPay Cards

More notes from the report

Split between Jan Dhan accounts and regular accounts: The number of RuPay cards under the Jan Dhan Yojana stood at 169 million and regular account cards stood at 55 million.

Average ticket size: The average ticket size of transactions of RuPay cards at ATMs and POS terminals is comparable to the ticket sizes of all debit cards issued. At ATMs, the transaction size was Rs 3,045 while at POS terminals, the ticket size was Rs 1,700.

average ticket size Rupay

Charges on transactions by RuPay: The report added that RuPay’s network charges a flat fee of 90 paisa per transaction on POS terminals (60 paisa from the issuing bank, and 30 paisa from the acquiring bank). Visa and MasterCard charge a variable fee  in proportion to the transaction concerned.

The report added that MasterCard and Visa charges banks around $30,000-50,000 as a one time fee and a quarterly fee of $10,000-30,000, while RuPay has waived off the both the charges.

Online transactions: RuPay said that the number of monthly online transactions increased from 0.2 million in April 2015 to 1.4 million in January 2016. The report also estimates that the value of online transactions in January 2016 increased to Rs 78.2 crore.

Rupay online estimate

Private banks have started issuing RuPay cards too: Traditionally, the RuPay cards were being issued by large public sector banks as part of the Jan Dhan Yojana. However, private sector banks too have begun issuing RuPay platinum cards to their urban user base. A detailed split here:

RuPauy banks split

Credit cards soon: The National Payments Corporation of India (NPCI) also said that it is looking to launch a credit card by September 2016. The RuPay card network was started in 2012 by the NPCI.

Cash@POS product: RuPay is also introducing a new product called Cash@POS through business correspondents which will allow a withdrawal of Rs 2,000 at POS terminals. So far, RuPay is clocking over 3,000 transactions per day through this.

RBI looking to boost POS terminals

In March, the Reserve Bank of India came out with a concept paper that is looking improving the card acceptance infrastructure. Accordingly, the RBI has outlined a broad strategy to enhance the growth in acceptance infrastructure through POS terminals and usage of cards which includes further rationalisation of  merchant fees for debit card transactions.

The RBI also mooted for setting up an Acceptance Development Fund (ADF) where different stakeholders in the card payment chain come together to set up a program to encourage wider deployment of card acceptance infrastructure. These are generally funded by card issuers to build a corpus by diverting a percentage of their transaction revenue into the fund which is then invested in structured initiatives to expand acceptance infrastructure.

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