MSME RuPAY Credit Card

Disclaimer: Copyright infringement not intended.

Context

• Union Minister for MSME Shri Narayan Rane launched the second phase of MSME RuPAY Credit Card.

 

What is RuPay?

• The National Payments Corporation of India’s (NPCI) brainchild, RuPay is a native card payments network initiated by the Reserve Bank of India (RBI).
• It is the first-of-its-kind global Card payment network of India.
• It is a financial services and payment services system launched in 2012 and dedicated to the country in 2014.
• A fusion between ‘rupee’ and ‘payment’ inspired its name along with the intent to bring India into the global payments market via its indigenous card facility.
• The proposition of a cashless India was enhanced with the introduction of the RuPay cards.
• Building a cashless economy requires financial inclusion and RuPay reached rural India and boosted digital payments with the Pradhan Mantri Jan Dhan Yojana scheme.
• Under PMJDY, 258 million RuPay debit cards were issued in 2020 alone from public sector banks under the Indian government's financial plan. From 15% in 2017 to over 60% in 2020, RuPay’s Indian market share has accelerated.
• With no domestic payments network, banks were forced to pay high affiliation charges to multinationals like Mastercard and Visa for trusted associations.
• Hence, NPCI was created as a non-profit payments company to construct an affordable and accessible payments network for Indians.

 

Where are RuPay cards accepted?

• They are accepted at all ATMs, by POS machines in India, and for domestic online and offline shopping.
• They aren’t accepted internationally except at those ATMs, POS machines and e-commerce websites where ‘Discover Financial Service’ (DFS) and ‘Diner’ is enabled.
• Presently, cards under RuPay Global are accepted at over 42.4 million POS locations and over 1.90 million ATM locations in over 185 countries.

 

Benefits of Rupay Card

• Being a domestic framework, banks issuing RuPay cards are at an advantage as they are not required to pay network registration fees unlike in the case of a Visa or MasterCard registration.
• It also has a greater reach in rural areas. Under the PMJDY scheme, free RuPay debit cards were given to all bank account holders. As all processing of transactions happens in the country, there is also a lower settlement cost.
• RuPay has both debit and credit cards for individuals, corporates, and prepaid cards; there’s a ‘Kisan Credit Card’, “MSME Rupay Card” available as well. There’s also a ‘contactless’ card that facilitates transactions on a single tap, making payments without disclosing crucial card details.

MSME Rupay Card

• In February 2022, Union Bank of India (UBI) launched “Union MSME RuPay Credit Card” in association with National Payments Corporation of India (NPCI).

Features

• MSME Rupay Card offers benefits like anytime digital payments, interest-free period and carries interest rate similar to the rate charged for loans.
• MSME borrowers will be able to enjoy an interest-free credit period of up to 50 days on their business spends.
• The card also offers the EMI facility to the customers on their business-related purchases.
• MSMEs also get specially curated efficient business services on this card which will help them in taking their business on most of the digital platforms.
• The RuPay Credit card simplifies and expedites payment mechanism for MSMEs while enabling banks to monitor the transactions at granular level. The Credit card also reduces the demand for cash withdrawal by the businesses due to availability of the digital payment tool.
• Other benefits include accidental insurance coverage, lounge access, and other rewards being offered by NPCI on RuPay cards. Besides this, the card offers variety of additional features and business services for the MSMEs.

 

Significance

• The initiative will digitally empower the MSMEs sector and help the convalescent sector to streamline its business expenses and finances.
• MSME industry is considered to be the backbone of the Indian economy and this card will help MSMEs to make digital payments with convenience.
• This card will further attract merchants to open their accounts in banks.

About NPCI National Payments Corporation of India (NPCI) was incorporated in 2008 as an umbrella organization for operating retail payments and settlement systems in India. The National Payments Corporation of India (NPCI) is a pioneer organization in the field of retail payments in India. It is a body promoted by RBI and has presently ten core promoter banks (State Bank of India, Punjab National Bank, Canara Bank, Bank of Baroda, Union bank of India, Bank of India, ICICI Bank, HDFC Bank, Citibank and HSBC). NPCI has created a robust payment and settlement infrastructure in the country. It has changed the way payments are made in India through a bouquet of retail payment products such as RuPay card, Immediate Payment Service (IMPS),Unified Payments Interface (UPI),Bharat Interface for Money (BHIM), BHIM Aadhaar, National Electronic Toll Collection (NETC Fastag) and Bharat BillPay. NPCI is focused on bringing innovations in the retail payment systems through the use of technology and is relentlessly working to transform India into a digital economy. It is facilitating secure payments solutions with nationwide accessibility at minimal cost in furtherance of India’s aspiration to be a fully digital society.

 

https://www.pib.gov.in/PressReleasePage.aspx?PRID=1824233