Digital Drive. It pays to get a RuPay card

Visa and Mastercard have always been the default payment gateway for debit and credit cards. India’s home-grown ‘RuPay’ has however come a long way since its launch as a rural product in 2011. It comes with features such as wider acceptance at many locations locally and globally, cash-back and other benefits. RuPay credit cards may also be issued shortly.

RuPay is a payment gateway system which is an alternate solution to Mastercard and Visa. It is operated by the National Payment Corporation of India (NPCI). Currently, over 600 banks, including all major public sector banks and many private banks as well as co-operative and rural banks, issue RuPay cards.

Cost efficiency both for banks and for merchants have made these cards popular. Banks pay lower fees per transaction for RuPay cards. Additionally, banks that issue the card do not have to pay any subscription or monthly fees. Costs are lower with RuPay, as processing happens domestically. The benefit to merchants is that the transaction fees are lower — about a third of what is charged by Visa or Mastercard.

Over 300 million RuPay cards are in circulation — this is about 40 per cent of the over 750 million debit cards in the country. Data for January 2017 shows that over 4.6 million RuPay debit card transactions happen each day, averaging ₹710 crore a day. Over 10,000 e-commerce sites have added RuPay as one of the payment options and two million e-commerce transactions for an average of ₹140 crore happen per day.

RuPay cards come in a few flavours, starting with a simple debit card. There is also a premium (Platinum) version with enhanced limits. These cards can also be used for e-commerce transactions. Banks may charge annual fee for the cards as well as transaction fee beyond certain usage limits. For instance, HDFC Bank charges an annual fee of ₹150 for its premium card.

Daily withdrawal limit on the card varies with bank. In HDFC Bank, the maximum amount that can be withdrawn from ATMs is ₹25,000 and shopping limit (e-commerce and point of sale) is ₹1.25 lakh per day. Axis Bank’s classic debit card comes with withdrawals of ₹40,000 at ATMs. For SBI, the maximum POS limit is ₹25,000 per day.

RuPay also offers a prepaid debit card which can be preloaded with money for transactions. Visa and Mastercard also offer prepaid cards, but RuPay has special tie-ups and deals. For example, the card issued by Union Bank for use at IRCTC sites has a limit of ₹10,000 for partial KYC or ₹50,000 with full KYC. The first five transactions per card for ticket purchase on IRCTC site are free every month; beyond that, users are charged ₹10 per transaction.

RuPay also offers international debit cards, in partnership with global providers such as Discover Financial Services, JCB International and UnionPay International. These cards typically have higher limits for transactions. For example, Bank of Baroda RuPay International Chip Debit Card has ATM cash withdrawal limit of ₹1,00,000 per day. The limit is similar to what you get with Visa International debit card from the bank.

The cards come with features such as SMS alert for transactions. Card holders are entitled to a personal accidental death/permanent disability insurance. The sum assured is ₹1 lakh for regular and ₹2 lakh for premium card holders.

While accident insurance may be offered by other cards, disability insurance is additionally covered for RuPay cards. Similar to Visa and Mastercard holders, various brands and merchants also offer deals to RuPay card users also from time to time.

Premium debit card holders can get concierge services. This service is typically offered by Visa for some debit card categories only. United Bank of India, for instance, does not offer it for its EMV debit card, but makes jt available on its RuPay platinum debit card. Platinum card holders have cash back benefits on utility bills, railway ticket bookings.

Additionally, the premium debit card can get you access to airport lounges in domestic and international airports. Card holders pay an authorisation charge of ₹2 and can use lounge facilities up to 2 times every quarter.

The facility is available at 31 domestic airport lounges and 549 International airport lounges. Some Visa and Mastercard debit cards also offer this feature, but the reach may be limited. For example, Axis bank offers only local airport lounge access on its Mastercard debit card at 28 locations.