A deal announced last week with Discover Financial Services would help expand use and acceptance of RuPay among residents of India's urban communities, officials from the National Payments Corp. of India tells PaymentsSource.
On March 7, Discover partnered with the payments authority for the acceptance of Discover cards and Diners Club International cards at RuPay ATMs and point-of-sale terminals in India (see story).
The deal primarily will help banks target urban cardholders, relatively few of whom are RuPay members compared with those living in rural and semiurban regions of the country, Sachin Nerulkar, head of business development at National Financial Switch, tells PaymentsSource.
National Payments manages the National Financial Switch, through which the ATM transactions of 63 Indian banks are routed.
The deal also will enable RuPay cardholders to use the Discover, Diners Club International and Pulse payment and ATM networks for international purchases and cash access outside of India.
Banks in India thus far have issued about 100,000 RuPay ATM and micro-ATM cards, about 60% of them in rural areas, according to Nerulkar. Rural and urban cooperative banks and regional rural banks primarily issue RuPay ATM cards as the payments authority pushes the Reserve bank of India’s mandate of financial inclusion.
National Payments plans to launch its first RuPay debit card for payment use by the end of March, Nerulkar says. “Bank of India Ltd. and Union Bank of India Ltd. would be the first two banks to launch these cards nationwide,” he says.
The authority also plans to ensure all 17 of its member banks issue RuPay debit cards, Sanjay Nazareth, head of card payment operations at the authority, tells PaymentsSource.
The authority eventually plans to introduce Rupay credit cards, Nazareth says, without revealing the exact timeframe.
“Those banks would then be able to offer RuPay acceptance across the globe to their cardholders,” he adds. “We already have 100% ATM acceptance across India, as Rupay cards are connected to the National Financial Switch.”
Regarding the Discover deal, the talks with the card brand began almost a year ago, Nerulkar says. The companies also expect to implement D-PAS, Discover’s EMV technology, to offer for chip-based RuPay cards to cardmembers.
The authority is adhering to the Reserve Bank of India’s mandate to migrate to a chip-and-PIN card issuance and acceptance infrastructure by the middle of 2013, Nazareth says.
The two will enact the deal in three phases beginning with the acceptance of Discover card at RuPay-enabled ATMs across India later this year, a spokesperson for the card company tells PaymentsSource.
“The second phase would see the acceptance of Discover cards at RuPay POS terminals early next year,” she says, suggesting National Payments will have the point-of-sale network ready by then.
“We will then enable RuPay global cards for international acceptance early to mid next year,” she adds.
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