Authored by Thyagarajan Seshadri, President of Banking Relations at Electronic Payment and Services Pvt. Ltd.
Financial services in India have undergone a sea change, with electronic payments and digital banking services bringing efficiencies, safety, accountability, and secure banking transactions and changing how businesses and consumers transact, with an objective of ultimately creating a less cash economy.
Innovative business models, disruptive delivery channels such as mobile wallet, UPI, IMPS, BHIM and e-money coupled with regulatory changes now allow interoperability across banks and non-banks seem to hold the key to a more efficient payment system.
India has approximately 700 million debit cards, including 240 Million RuPay cards, 30 Million credit cards. Strengthening the RuPay Issuance and RuPay network, BharatQR is the need of the hour.
RuPay cards were launched back in 2012 by NPCI. In the past five years, RuPay has witnessed a tremendous growth, led by the Pradhan Mantri Jan Dhan Yojana. Out of the 645 million debit cards issued in India today, 38% of it are RuPay cards. Apart from PMJDY, establishing a dependable domestic network have also contributed to the growth of RuPay cards of India. In addition, RuPay has received considerable support from banks, Coop Banks, and acceptance from online and offline merchant platforms, e-Comm companies, IRCTC, Travel booking aggregators etc.
NPCI has also enabled 200 District Central Co-operative Banks under their network. All this has been a contributing factor in RuPay’s growth from 17mn in FY14 to nearly 247mn by FY16. It was also observed that usage of RuPay cards at point of sale (PoS) and for e-commerce together that used to be about 3 lakh per day shot to about 2.1 million. On the other hand, while Bharat QR has just been launched it provides the customer and merchants an option beyond debit cards. There should be a strong push from the government to ensure the Issuance of RuPay Cards by all Banks in India, on Mission Mode so that that the nationwide acceptance of RuPay cards is achieved and also the RuPay Network strengthened for seamless payment acceptance .
One of the ideal ways to increase the acceptance infrastructure of both these payment methods is to implement Common Procurement Program of retail delivery channels, across all banks. The entire implementation should be divided into short term and long term. With Mission Mode, a task force comprising lead banks, payment system companies would ensure the acceptance infrastructure is ready in the next two years. Also, Government of India / Ministry of Finance, should instruct Public Sector Banks and Private Sector Banks to issue Rupay Cards and to deploy BharatQR code.
Furthermore, there is a need for establishing a proper marketing and promotional campaign for RuPay and BharatQR to achieve widespread recognition among the rural and urban masses. These measures when combined with a partnership with finance and payment banks, will pave a way to boost digital transactions.
