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Our take: RuPay cards get a push, as switching fees for online and PoS txns are waived

The National Payments Corporation of India (NPCI) has waived off switching fees for all RuPay cards for ecommerce and PoS terminal transactions. This was in effect since November 11 and will extend to December 31, 2016. Of the 755 million debit cards in circulation RuPay cards account for 40%, around 302 million in total. IMPORTANT: this waiver of fees is not applicable to MasterCard and Visa. Note that RuPay’s network charges a flat fee of Rs. 0.9 per transaction on PoS terminals (Rs 0.6 from the issuing bank, and Rs 0.3 from the acquiring bank). Visa and MasterCard charge a variable fee  in proportion to the transaction concerned. The NPCI added that the switching fee would be refunded to both issuing and acquiring banks before January 31, 2017. An issuing bank is the bank which issues a debit card while an acquiring bank is the bank which accepts the payment from a merchant. It also asked all banks to issue cards for current and savings accounts (CASA) which have no yet been carded to promote digital transactions. The Jan Dhan advantage, but will it work? It needs to be pointed out that a majority of RuPay cards are issued under the Jan Dhan Yojana scheme for financial inclusion (the number of RuPay cards from Jan Dhan Accounts stood at 194 million). As such, many of these cards are not being used at all by these account holders (23.7% of 25.5 crore accounts opened under Jan Dhan Yojana have zero balance). Usage of RuPay…

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