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Tag: RuPay

  • As RuPay on UPI faces some roadblocks, NPCI explores corrective options

    As RuPay on UPI faces some roadblocks, NPCI explores corrective options

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    The National Payments Corporation of India (NPCI) is exploring ways to encourage payments made via RuPay credit cards linked to UPI (Unified Payments Interface), a medium that has been facing some roadblocks due to slower-than-expected adoption.

    The government introduced UPI payments via RuPay credit cards in September last year. While allowing the linkage of RuPay credit cards on UPI has increased the acceptance infrastructure for such cards multi-fold, the biggest drawback is the inability of merchants and banks to differentiate between card on UPI and regular UPI transactions being made via QR codes.

    “It was launched in a hurry and it is still a problem because when you go to a small merchant and pay by credit card, they are used to zero MDR. But if a credit card is used they get less money,” a senior payments industry official told businessline.

    “Even in the case of bigger merchants, banks have tie-ups for fixed retailer rates but these have gone up because of RuPay and UPI. While these merchants have higher margins, they are also now questioning banks,” they added.

    Even as UPI transactions continue to be free, UPI transactions made via linked credit cards attract the same interchange and merchant discount rate (MDR) as any other credit card transaction.

    Some sections of the industry also believe that the effective MDR on card UPI transactions is higher than card PoS (point-of-sale) transactions due to the additional layer of intermediaries such as PineLabs which absorb part of the cost for pure card transactions.

    UPI vs card on UPI

    The lack of prior classification between the transaction type has led several merchants, especially large offline merchants, to accept such UPI payments without realising the extra charge they attract. As a result, certain payment gateways and banks, at the behest of the merchants, stopped accepting payments via RuPay on UPI.

    In response, the NPCI has now gone live with a mechanism, which once integrated by payment gateways and intermediaries, will allow merchants and banks to identify and classify the two types of transactions and accordingly assess the charge.

    “NPCI has built the system, it is already live. It includes a return parameter, so if it is a credit card on UPI transaction, it alerts the system that it needs to be treated as a credit card transaction and not UPI,” a source said adding that the update is received both at the merchant and bank end.

    NPCI introduced this on an ad hoc basis and the functionality has been live for the past month or so and should be adopted by most payment intermediaries over the next 15-20 days, sources said.

    “It was done as an afterthought, so this has left a little sour note. We lost some money which we could have avoided if we had been able to inform the merchants in advance,” said the head of a payments platform that had to pay additional money to banks once credit card on UPI was introduced. He added that it would’ve been smoother if the NPCI had tested the ecosystem before introducing the feature rather than correcting it after launch.

    However, fearing lower adoption of or merchant discrimination against RuPay UPI transactions, and to encourage increased adoption, the NPCI is also exploring a fee income-based incentive model where payment gateways may compensate merchants for the higher charges on such transactions compared with the zero charge on regular UPI transactions, a source said.

    NPCI has been pushing the issuance and adoption of cards on the RuPay network to reduce the reliance on foreign players such as Visa and Mastercard, and for easy linkages with other products in NPCI’s suite including UPI.

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  • SBI Card enables RuPay credit cards on UPI

    SBI Card enables RuPay credit cards on UPI

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    SBI Card, the country’s largest pure-play credit card issuer, and the National Payments Corporation of India (NPCI) have announced the linking of SBI credit cards on the RuPay platform with the Unified Payments Interface (UPI). Starting Thursday, SBI Card customers will be able to make UPI transactions through their credit cards issued on RuPay.

    The functionality can be availed through registering the credit card with third-party UPI apps. This will further enhance the avenues for customers using SBI Card on the RuPay platform at UPI merchants, thus facilitating an enhanced, convenient, and seamless payments experience.

    Cardholders can enrol their active primary cards on UPI and make payments to merchants (P2M transactions) using their credit cards. This facility is free for customers.

    To ensure successful credit card linking with UPI, it is important to note that the cardholder’s mobile number registered with SBI Card should also be linked with UPI.

    As of June 2023, SBI Card had a cards-in-force (CIF) base of 1.73 crore, up 21 percent year-on-year as of June 2022.

    Commenting on the move, Rama Mohan Rao Amara, MD and CEO, SBI Card, said, “With this functionality, SBI Card customers will be able to use their SBI Card-issued RuPay credit cards on the UPI platform. Today, UPI has become a massive digital platform, enabling millions of transactions every day”.

    Flexibility

    This should give SBI Card customers greater flexibility and mobility along with hassle-free usage, he added. With this, the industry is going to witness a significant increase in credit card usage, Amara noted.

    Dilip Asbe, MD & CEO, NPCI, said, “The addition of SBI RuPayCredit Cards on UPI rails is a big milestone in the growth trajectory of digital payments in India. This partnership will enable seamless UPI payments for SBI RuPay credit cardholders, providing them with a digitally enabled credit card lifecycle experience”.

    With the rising demand for credit cards in the country, it becomes imperative to continuously build innovative payment solutions, such as linking RuPay Credit Cards with UPI, that are convenient, swift, and secure, Asbe added.

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  • 25% of new credit card issues happen on RuPay network: NPCI Rai

    25% of new credit card issues happen on RuPay network: NPCI Rai

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    About 25 per cent of all new credit card issuances are happening on the RuPay network, according to Praveena Rai, COO, NPCI (National Payments Corporation of India).

    “Cards in force are growing fast, driven by the innovative product suite. Volume growth is multiplying; it’s more than doubling,” Rai said on the sidelines of the launch of the SBI Paytm credit card on the RuPay network.

    Even though 52 per cent of customers on the UPI network are credit active, only 3–10 per cent use credit cards. The NPCI said that of the over 30 crore UPI users, 2.5–3.0 crore are credit card holders.

    Huge opportunity

    This provides NPCI with a huge opportunity to grow its credit card portfolio and market share now that the RuPay network has been integrated with UPI, Rai said, adding “there are a number of programmes already launched on RuPay and there are many in the pipeline,” including more tie-ups for co-branded cards.

    NPCI’s RuPay has a 35 per cent market share in the debit card market in terms of volume, 30 per cent in terms of the value of card spends, and 69 per cent in terms of cards in force. The thrust on credit cards began about 3–4 years ago with a focus on technology and innovation, local market requirements, product differentiation, and building brand value.

    “We told ourselves that unless we are building the stature of RuPay on the credit side, we can’t lay claim to the fact that RuPay is India’s indigenous card network, and for that, we really changed gears on credit,” Rai said at the event.

    The credit card portfolio has seen a spike since the linking of the RuPay network to UPI, she said, adding that this card will “emerge as a keystone credit solution” as it offers the convenience of acceptance of credit cards across all UPI points with card benefits such as rewards and cashbacks.

    “What NPCI has done phenomenally well with UPI and QR is incredible. RuPay credit card riding is the game changer here,” said Nalin Bansal, Chief of Corporate and Fintech Relationships and Key Initiatives at NPCI.

    The SBI Paytm card, originally launched in November 2020, will be issued instantaneously and will not require tokenisation at merchant touch points as the UPI ID will become the de facto token.

    Under the RuPay launch, it will offer benefits up to ₹75,000 with a complimentary Paytm First and OTT platform membership, flight ticket discounts, rewards, savings, and cash backs.

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  • IDFC First Bank launches sticker-based debit card, FIRSTAP

    IDFC First Bank launches sticker-based debit card, FIRSTAP

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    IDFC First Bank has rolled out a sticker-based debit card, called FIRSTAP. The launch is in association with National Payments Corporation of India (NPCI), to facilitate transactions by simply tapping the sticker on a Near Field Communication (NFC) enabled point-of-sale terminal.

    Sumit Madan, head, retail liabilities and branch banking, IDFC First Bank, on the occasion of the launch said, “The launch of sticker-based debit card is in line with the bank’s customer-centric philosophy. The number of transactions being carried out via contactless cards are growing fast. As a customer-first bank, we are committed to using contactless technology for frictionless digital transactions. With sticker as the form factor in the wearable category, the debit card is convenient to carry around and enables fast check-out.”

    The sticker-based debit card is one third the size of a regular debit card, thus, making the sticker applicable on a wide range of devices and objects, and significantly enhancing customer convenience, the company said in a statement. Madan added that there are multiple use cases for this form factor.

    As per the company, customers can affix the sticker-based debit card on any surface of their choice, such as cell phones, identity cards, wallets, tabs, airpod cases, among others. The object can be used to tap and pay, thus doing away with the need to carry a debit card or adapting to wearable devices such as watches and rings or entering a UPI PIN after scanning a QR code.

    “This new innovative offering is an ode to the go-getter, the spirited individuals who are always on the go. With this new form factor, it seamlessly integrates into the consumers’ lifestyle as well as makes it a contemporary choice for modern Indians. At NPCI, we emphasise working with ecosystem partners to bring innovative solutions to any existing latent demand. We are focused on our endeavour of building new, innovative and beneficial products and services for our end-users,” Rajeeth Pillai, chief relationship management and marketing, NPCI, stated.

    The IDFC First bank sticker debit card comes with a complimentary personal accidental cover and 24/7 concierge services with a host of RuPay offers. The touch-free way to pay enables payments in seconds for transactions up to Rs 5,000 without a pin, and those beyond that, with a tap and PIN.

    Also Read: ‘Indian banks are outstanding, international banks terrible,’ claims Zerodha’s Nikhil Kamath

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