National Payments Corporation of India (NPCI), a non-profit organisation under the control of Reserve Bank of India, has unveiled a new card payment system, RuPay, allowing people to make ATM withdrawals, payments at merchant outlets and carry out online purchases.
Competing with MasterCard and Visa, RuPay will initially be made available within the country, and NPCI plans to make it a mode of payment in overseas as well.
According to NPCI, the RuPay platform will reduce cash transactions as it will lower the fee of clearing and settlement per transaction; it is expected to be 40% lower than the fees charged by Visa and MasterCard.
Many Indian banks including ICICI Bank, State Bank of India and Punjab National Bank, amongst others, are already using the gateway for clearing and settlement.
Currently, RuPay is accepted at over 160,000 ATMs, 95% of some one million point-of-sale (PoS) terminals and by most e-commerce merchants.
India President Pranab Mukherjee, who unveiled the card, said for a large country like India with a rapidly growing economy, the volume of payment transactions, specially those settled through cards, will be significant in the years ahead.
"Transactions which are mostly settled today either by way of cash or cheque will progressively make way for card-based payment transactions as the economy matures and Internet penetration increases," Mukherjee added.