It was recently reported in Business Today that NPCI was about to launch credit cards with the RuPay brand. This is a very welcome and much overdue plan. While the NPCI ATM switches are capable of carrying large amounts of transaction volumes, it was puzzling why the organization did not push for credit cards in conjunction with banks.
Currently digital payment adoption is not as popular as it should be due to the higher cost of doing business – up to 2.5% of the transaction amount having to be borne by the establishment/place of business as this includes the cost of enabling the transaction – including issuing the card, providing credit, settling the transaction, etc. The transaction involved global biggies – including MasterCard and Visa – which provided a larger audience for cards/merchants as well – and also meant that the transaction was done “overseas”. The Chinese government very early on realized this and decided to provide a solution where Chinese cards being used on Chinese establishments/websites, would not have to utilize the Visa/MC network, thereby resulting in lower cost of operations.
This announcement should go a long way to ensure higher adoption of digital payments in India.