new Delhi. Due to the Russia-Ukraine War, international card companies shutting down their services in Russia have worried all the countries. Attempts to use modern technologies related to the common people as a weapon and stall the economic system of a country have raised questions about the credibility of card companies like Visa, Mastercard and American Express. have been given. Now there is a demand to strengthen the indigenous card network system in India as well.
In 2018, Prime Minister Narendra Modi called for reducing dependence on cards like Visa, Master Card and American Express, saying that every citizen of the country cannot fight at the border to protect the country. But, he can serve the country by using RuPay. But, the big question is whether the country has prepared the option of these international cards. in live mint An article by Andy Mukherjee According to this, India will have to struggle a lot to become self-sufficient in this area.
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Is RuPay able to replace Visa?
RuPay was introduced by the National Payments Corporation (NPCI) in 2021. Like Russia’s Mir and China’s Union Pay, it is also an indigenous card network. In the last few years, India has spread RuPay in such a way that Visa Inc has even complained to the US government in this regard. Not only this, the Reserve Bank of India’s rule of collection of data at the local level has also put MasterCard and American Express in trouble. The way global card firms have boycotted Russia after Russia’s attack on Ukraine, it has underscored the need for indigenous card networks in all countries. It is due to the overwhelming support from the government that 600 million RuPay cards have been issued in India by the end of 2020. This is an increase of 17 percent as compared to 2017.
still a long way to go
More Rupay Debit Cards have been issued. These have been issued to the account holders of free accounts opened by the Government of India to give the benefits of government schemes to the people directly in the bank accounts. But still, if only 1 or two percent of the country’s people shop using RuPay, then this will not lead to the departure of Visa or American Express cards from India. In January itself, about 878 billion rupees were purchased through the card in India. Card users want a card that is internationally recognized and accepted by e-commerce websites.
Dependence on foreign technology for internationalization
NPCI has set up a unit dedicated to internationalization of RuPay. RuPay’s ten year old tie-up with Discover Financial can give RuPay acceptance in overseas markets. In 2020, Discover’s CEO Roger Hochschild, while addressing investors, described it as a very successful collaboration. Roger said that we will provide secure remote commerce connectivity to Rupay and he will take care of every need of the market. But the big question is whether it is right to rely so much on the technology of another American card firm to reduce dependence on foreign cards. Not only this, RuPay’s other partnership with JCB International Company of Japan is also unlikely to give it the benefits it needs.
UPI can do wonders
However, India has another technology instead of plastic cards, which can be easily internationalized. That is Unified Payments Interface (UPI). This mobile phone based technology operated by NPCI is completely Indian. The apps running on it can do more transactions than the digital transactions done by both the credit card and debit card together. Its use is also increasing continuously. NPCI had tied up with Mashreqbank PSC of Dubai only last year. After this agreement, about 2 million Indians going to the Arab Emirates every year will be able to use UPI there too.
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Nexus may also work
Apart from direct deals with other countries, India can also take other steps for payments. The Monetary Authority of NPCI and Singapore have made a prototype named Nexus. It can interconnect digital payment systems existing in more than 60 countries. Nexus is not an app but a set of rules that can become the World Wide Web of Payments and any country can accept these rules and become a part of it. Penau of Singapore had cross country link for the first time in the world with Prompt Pay of Thailand last year. With its help, money can be sent to any mobile number. However, it has not yet provided the facility of payment through QR code to the users. But, still it is not very difficult to use it. If we talk about the long term, then Nexus Open Approach Network is more effective.
Tags: business news, mastercard, Rupay, Visa
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