With forex cards, RuPay looks to make a mark globally. Here's all that you need to know about the payment network

The National Payments Corporation of India (NPCI) developed Rupay, a card payment network. NPCI was incorporated in 2008 to operate retail payment and settlement systems in India. It is backed by the RBI and the Indian Banks’ Association (IBA).

RuPay was launched in March 2012 and has since been promoted by the government as India’s homegrown card network.

Globally, Visa and Mastercard are the two most widely used card payment networks. Then there are others, such as American Express, Diners Club International (owned by Discover Financial Services), and JCB (formerly Japan Credit Bureau). In the same way, RuPay is India’s indigenously developed card payment network, but with much smaller acceptance globally.

As with Visa and Mastercard cards, RuPay cards are not issued by RuPay itself but by banks. RuPay’s network helps the transaction go through. Today, you have RuPay debit cards, RuPay credit cards, and RuPay prepaid cards. Next in line are RuPay forex cards.

Are RuPay cards widely used?

According to RBI data, RuPay cards dominate the debit card segment in India. As of January-end 2022, there were over 651 million RuPay debit cards, accounting for a 65 percent share of the total debit cards issued. However, their share in the credit card segment was less than 3 percent.

If we go by NPCI statistics, RuPay card transactions totalled Rs 2,446 billion in value in 2022-23. The number of transactions stood at 1,263 million in 2022-23.

Their high share of debit cards has been aided by the bank accounts opened under the Pradhan Mantri Jan Dhan Yojana (PMDJY). PMDJY is a financial inclusion scheme launched by the government in 2014 under which one can open a zero-balance basic savings bank account. PMDJY account holders are, by default, offered a RuPay debit card.

However, in terms of the value of transactions, RuPay cards likely have a much lower market share, say experts.

How to get a RuPay debit or credit card?

More than 1,100 banks, including public sector banks (PSBs), private sector banks, regional rural banks (RRBs), and cooperative banks, offer RuPay cards, according to the RuPay website. Now, public and private sector banks offer Visa and Mastercard cards. So, which of these cards (debit or credit) is a bank likely to offer you?

Sumanta Mandal, the founder of TechnoFino, a platform that reviews debit and credit cards, says, "Many public sector banks are issuing RuPay debit cards to their customers. In the case of private sector banks, you will have to request the bank for a RuPay card as this card is not offered by default."

According to Kashif Ansari, Assistant Professor at O.P. Jindal Global University, it’s not so much a question of private versus public sector banks as the kind of bank account (premium versus basic) that determines what card a bank will offer you. "If you go for a premium savings bank account that requires a minimum average balance of, say, Rs 10 lakh, then even a public sector bank is unlikely to offer a RuPay card to you. However, there are public sector banks such as Bank of Baroda, for example, that tend to offer RuPay cards to most of their customers," adds Ansari.

Should you go for a RuPay debit or credit card?

The answer to that depends on what you are looking for. First of all, if you are interested mainly in reward points, then a credit card (and not a debit card) will be more useful. In this case, as Mandal points out, a Visa or Mastercard credit card is likely to offer you a better credit card rewards programme compared to a RuPay credit card. Note that, as with other credit cards, RuPay credit cards too come in different variants: Classic, Platinum, and Select.

Ansari highlights one use case for RuPay credit cards for those living in Tier 2 and 3 cities and in Tier 1 (in the case of smaller merchants). "In places where merchants may not have a POS (point of sale) machine needed for card transactions, you can instead make payments via UPI linked to your RuPay credit card. "Select RuPay credit cards offered by banks such as Axis Bank, Bank of Baroda, Canara Bank, etc. can be linked to UPI, something that’s not possible with any of the Visa or Mastercard credit cards," adds Ansari.

As for debit cards, Mandal feels that the RuPay Select debit card can be a good choice as it offers some very good benefits at a reasonable cost (fees vary across banks). The benefits include complementary preventive health check-ups, spa services, etc., and more importantly, personal accident insurance and permanent disability cover of up to Rs 10 lakh. Other debit cards do not offer such benefits.

When asked why one should go for a RuPay card (debit or credit), Ansari said that, while it may not make sense for someone with only one or two cards to opt for a RuPay card, it can be a useful option for someone holding multiple cards. This, according to him, is because of the cash-backs and other offers that RuPay cards offer.

For example, under an ongoing offer (until August 15, 2023), RuPay JCB debit and credit cardholders will receive 40 percent cashback (subject to an upper limit) on purchases made at retail stores in the UAE, Thailand, Malaysia, and Spain.

Also read: e-RUPI vouchers get a boost from RBI monetary policy

What are the drawbacks of RuPay cards?

The biggest drawback of RuPay cards is perhaps their lower acceptance ratio for transactions outside India. Unlike Visa and Mastercard cards, which are accepted worldwide, international payments via RuPay cards have a lower chance of being accepted.

Mandal, however, points out that RuPay’s tie-ups with JCB Co. and Discover Financial Services have helped improve its acceptability internationally. Such tie-ups ensure that RuPay cards get accepted overseas at ATMs and POSs and for e-commerce transactions wherever JCB and Diners Club cards are accepted. As pointed out in an RBI report on Benchmarking India’s Payment Systems, dated July 2022, these co-branded cards are accepted in over 195 countries.

The report further points out that NPCI has entered into arrangements with Bhutan and Singapore to accept RuPay cards without co-branding with other international card schemes. This is to boost the demand for RuPay cards among the residents of these countries.

As the acceptability of RuPay cards for international transactions improves, their popularity and usage are also expected to get a leg up.

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