With the advent of debit cards, banking transactions have become really simple. You don’t have to queue up outside a bank to withdraw cash. All your transactions can be done through the debit card. You can swipe it at a merchant establishment and use the card to withdraw money from the ATM. Using internet banking services, you can transfer money in a matter of seconds from your account into your beneficiary’s account.
In India, most banks typically provide four types of debit cards with your savings or current account. These are the Visa debit card, the MasterCard debit card, the Maestro debit card, which is also a part of the MasterCard enterprise and the RuPay debit card. The first three belong to the international payment systems. RuPay belongs to the domestic payment system. Till RuPay was introduced, the foreign cards dominated the market. The problem was that not all parts of India have access to banking facilities. International payment systems are not supported at the merchant establishments in the rural areas. RuPay was introduced as a solution to curb these problems. Right now, the customers can weigh the benefits of Rupay v. Visa before making a choice. Here’s what you need to know about the difference between RuPay and Visa card before you make a choice.
What is Rupay card?
The RuPay payment system was established by the Board of payment and Settlement systems by the Reserve Bank of India in 2005. At present, the RuPay debit card has become one of the most popular debit cards accepted all over the country.
RuPay was introduced at a time when the government realized that a domestic payment system is required for increasing access to financial services across India. This led to the formation the National Payment Corporation of India promoted by the Reserve Bank of India. The RuPay card was introduced in 2012. RuPay cards have seen a massive growth in the last few years.
RuPay cards can be used for processing transactions domestically. It is only accepted at domestic payment systems. You cannot use a RuPay card while travelling abroad. The transaction cost associated with RuPay card is very minimal as all the transactions take place within India. RuPay only issues debit cards. Banks which issue and accept RuPay cards do not have to pay any transaction charges.
What is Visa card?
Most banks in India issue a Visa Debit Card. For such cards, the bank has tied-up with Visa international payment services. Visa debit cards are regarded as the most globally accepted debit cards for all kinds of online and electronic transactions. These cards can be used within and outside India. The VISA ATM network is spread throughout India and abroad. This provides you easy access to cash withdrawal facility.
Online transactions take place through the secure Verified by Visa payment platform. The cardholders also have an overdraft facility.
There are different types of Visa Debit cards. Usually, banks issue Visa Classic Debit Card, Visa Gold Debit Card, Visa Platinum Debit Card, Visa Signature Debit Card, and Visa Infinite Debit Card. Each card has its own unique features.
Banks also issue Visa credit cards which have a host of unique benefits. Each bank offers a number of Visa credit or debit cards, depending on your requirement. The cost of transaction involved in using a Visa card is high as an international payment system is used. The banks supporting Visa cards also have to pay a separate network fee.
Rupay vs Visa cards
While the RuPay debit cards have become increasingly popular in India in the last few years; when it comes to choosing one of the debit cards between the two, most customers are not aware about the key difference between rupay and visa card. Here is what you need to know:
Type of card: RuPay cards are only debit cards. It is linked to the savings account in your bank. Payment through the Visa platform is provided for both credit and debit cards.
Acceptance of the card: The RuPay debit card is widely accepted at several online and retail merchants across India. You can also use your RuPay debit card to pay your utility bills online. RuPay card is only accepted domestically. You cannot use the RuPay debit card to make payments for products from international websites. You cannot use the card when you are travelling abroad.
The Visa system is an international payment system. It is widely accepted for payments in almost every country across the world. You can choose a debit card or a credit card depending on your requirement.
Processing fees: Transactions made on the RuPay debit cards are processed within India. The processing fees for domestic transaction is relatively lower as opposed to the fees levied on visa card transactions. Since the Visa is an international payment system, the processing of the transaction takes place abroad. As a result, the service provider charges a higher processing fee.
Cash Withdrawal at ATMs: You can use both your Visa and RuPay debit cards to withdraw cash on the go. You can use the RuPay debit card to make cash withdrawals anywhere in India. It cannot be used to withdraw cash when you are travelling abroad. A Visa card has no such limitation. It can be used even at ATMs located outside India.
The structure of the fees: Individuals holding a RuPay debit card do not have to pay any entry or quarterly fees. The card comes free of cost with your savings account and there are no fees levied on the card in perpetuity. When your card expires, you are automatically provided with a new card without any added charges. Banks providing the Visa debit card to their customers are expected to pay the Visa payment system, both an initiation fee and a quarterly fee. You are also charged each time a new visa debit card is issued to you.This includes when a card expires and a replacement card is issued and if your card is stolen or lost and a replacement card is required.
Target audience: The RuPay debit card was primarily launched with a view to tap the untapped consumers in the rural areas of the country and provide them with banking and financial services. The Visa card has remained a popular choice in the Metros, tier I and tier II cities. However, banks in India’s bigger cities are also now offering RuPay debit cards.
Safety and security: Transactions done on both RuPay and Visa debit cards are considered safe and secure. RuPay transactions are chiefly domestic in nature, you can rest assured that your card information is protected. While Visa transactions are processed internationally, the payment gateway is also highly secure. You can sanction your online payments using the verified by visa; a second layer payment gateway in which you must authorise your payment by entering a one-time password sent to your registered mobile number linked to your bank account.
Innovation and presence: The Visa debit payment system is already regarded as a reputed payment system that is accepted globally. You can use the debit card for all kinds of transactions including cash withdrawals across the globe. The RuPay debit card is following in the footsteps of the visa card and will soon be available for use in the international markets as well.
Are debit card fees on Visa card higher than Rupay Cards?
Transactions charges for transactions processed on Visa cards are slightly higher than RuPay cards. The government has popularised RuPay payment as part of their financial inclusion drive. Therefore, the processing fees on RuPay transactions is lesser compared to Visa card.
After reading the difference between Rupay and visa card, I want to choose RuPay card. Most banks generally offer Visa or MasterCard debit cards when one opens an account for the first time. How can I opt for a RuPay card instead?
When you fill the form to open the bank account, you can choose the type of debit card you prefer from the different payment systems. You can choose the RuPay card as your preferred debit card while filing the form.
RuPay v.Visa cards – how do I make the right choice?
The primary consideration in making this choice will depend on the kind of transactions you do. It is unfair to say that one is better than the other, but thanks to several offers made by the Government of India, the average Indian customer may have better benefits while using RuPay card.