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 cards and Mastercards 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.

Outcomes

 MasterCard faces an indefinite ban on issuing new cards in India after the central
bank said it was not complying with the 2018 rules. A USTR official privately
called the MasterCard ban “draconian”
 While RuPay dominates the number of cards in India, most transactions still go
through Visa and MasterCard as most RuPay cards were simply issued by banks.
 Under the Pradhan Mantri Jan Dhan Yojana (PMJDY) which was flagged off
back in 2014, the government issues only RuPay debit cards to new account
holders. This is the biggest leg-up for RuPay in terms of lending a fair share of
the debit card market to the NPCI card.
 RuPay plans to grow its credit card business and is also working on growing its
contactless payments offerings which allow to make payments through smart
phones and watches. Experts also believe that RuPay could be successful in
transitioning its existing customers into using their premium products over time.
 With its ambitions to grow in areas where it currently is lagging, will RuPay be a
big threat to Visa and MasterCard even in the credit space?
 “India’s credit market is highly underpenetrated. It is expected to grow by 3x in
the next few years and that means all players can get a fair share of the market
based on their offerings. It is an open and competitive market.”

CURRENT SCENARIO

With the aggressive push towards UPI and Rupay by the Indian
Government, global giants Visa and Mastercard are losing their dominance
as Digital Payments Ecosystem in India proliferates.
POLITICAL FAVOURISM OF RUPAY OVER MASTERCARD AND VISA

US-based payments giant Visa has complained to the US government

stating that India’s “informal and formal” promotion of Indian
payments service RuPay hurts Visa’s presence in India.

According to Reuters, Visa claims that Indian PM Narendra Modi’s

backing of National Payments Corporation of India (NPCI), the non-
profit that runs RuPay over other domestic and foreign digital
payments companies, scuffles the level playing field in one of the
world’s largest fintech markets. In 2018, another US-based payment
giant Mastercard raised similar concerns with the US government,
citing that Modi was using nationalism to promote RuPay.

That same year, supporting the homegrown payment service, Modi

had said, “If we use other cards, the earnings from them will go to
foreign countries, but in the case of RuPay all transactions stay in
India. The transaction fees earned through the homegrown card
network will help in building roads, schools and hospitals for the poor.”
Playing the patriotism card, he had then urged the usage of RuPay to
be equivalent to serving at the border.

RUPAY VS VISA AND MASTERCARDS

RuPay, Visa and Mastercard are payment networks that have collaborated with the banks to
issue debit cards. You can apply for a RuPay Debit Card through the bank which you have
savings account with and the bank will give you a debit card as per the eligibility. However,
RuPay cards work differently as compared to Visa and Mastercard. They are accepted
domestically and comes with a faster processing time. Here are the differences between
RuPay, Visa and Mastercard:
Acceptance: As mentioned earlier, RuPay is an Indian network and is accepted only in India.
On the other hand, Visa and Mastercard are international payment networks and they are
accepted across the globe. RuPay cards are designed only for domestic use and cannot be
used for overseas transactions.

Processing Time: Being a domestic payment network, RuPay cards work quickly as

compared to Visa and Mastercard. This is because whenever you make a transaction, the
data is sent to the payment network for verification. So, for RuPay, the data is processed
within the country which takes lesser time whereas, for Visa and Mastercard, the data is
sent to the servers available outside the country, which increases the processing time.
Hence, for domestic use, RuPay cards are a better option than Visa or Mastercard.

Fees & Charges: RuPay provides its services to the bank without any charges, whereas,
banks have to pay a quarterly or joining fee to avail the services from a foreign payment
network. Hence, with RuPay, there are no processing or transaction charges levied.
However, the bank may charge an annual fee for using a RuPay debit or credit card. But the
overall fees and charges levied on RuPay cards are fewer than Visa or Mastercards.

Security: When it comes to security, RuPay cards are more secure than Visa and
Mastercards. One of the major reasons is because it is used within India and the data is
shared only with the national networks. However, for Visa and Mastercard transactions, the
data is shared internationally which increases the risk for data theft or phishing.