scorecardresearchRuPay and Master card: What makes them different?

RuPay and Master card: What makes them different?

Updated: 27 Nov 2022, 01:59 PM IST

Each bank offers its own debit card to customers, but most of these cards can broadly be divided into three categories - Visa, MasterCard and RuPay card. Read further to know what these cards offer.

Just as any other international card, RuPay card enables electronic payments at all banks and financial institutions.

Just as any other international card, RuPay card enables electronic payments at all banks and financial institutions.

Not too long ago, making payment to someone meant transferring money by cash or cheque, unless it was mentioned otherwise. Now, the times have changed so rapidly and drastically that the same thing usually means transferring money online via a debit card, unless – of course —mentioned otherwise.

And when we talk about the online payment gateway cards, we have a range of options to choose from: Master Card, RuPay Card and Visa. Let us understand how they are different from each other.

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RuPay Card is an indigenous payment gateway card launched by the National Payments Corporation of India (NPCI) in March 2012. It was part of the Reserve Bank of India’s (RBI) plan of rolling out an Indian version of international payment cards such as Master Card and Visa. Just as any other international card, RuPay card enables electronic payments at all banks and financial institutions.

The card got an impetus after the Government of India rolled out PMJDY (Pradhan Mantri Jan Dhan Yojana) in 2014. This is a financial inclusion scheme meant to bring unbanked people into the fold of banking. Thanks to this scheme, millions of RuPay cards were given to the Jan Dhan account holders who can use them to transfer money electronically at PoS (point of sale) just as any other debit card holder.

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The RuPay cards are issued by the banks across all categories -- public sector, private as well as cooperative banks. In June 2017, RuPay credit cards were also issued by a dozen banks including HDFC Bank, IDFC and Bank of India, among others.

Since RuPay is an indigenously built card. It has a lower processing fee in comparison to such global cards as Visa or Master Card.

Let us understand how processing of transactions takes place. Whenever a payment is requested on the Master Card or Visa, the request is sent overseas where the servers are located. This, naturally, takes slightly longer and costs also marginally higher in comparison to a RuPay card that is connected to the local servers.

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Master Card and Visa

These cards, till recently, were synonymous with digital payments, especially until RuPay card was launched in 2012. The functions and features of all debit cards, by and large, are the same. What, however, distinguishes them from the RuPay card is the fact that they store their transactions overseas, and hence, attract relatively higher processing charges. On the other hand, RuPay, being conceived and developed in India, stores the transactions on Indian servers.

Which card to use?

There is no clear answer to this because almost all the features in these cards are similar. They work like ATM cards and facilitate online payments to most established businesses including online market places such as Amazon and Flipkart, physical stores, restaurants, airlines, malls and clubs, among others.

However, there is no denying the fact that RuPay is seen as a safer card since its transactions are recorded locally and shared amongst national partners such as banks, whereas the Visa and Master Card payments are stored globally, making them more prone to phishing attacks outside India.

All debit cards have the same features but they differ on certain parameters.

Another distinction that can help you choose one card over the other is the card’s acceptance rate among merchants. RuPay card is usually accepted widely nationwide whereas the international payment gateway cards – Master Card and Visa have higher global acceptance. However, RuPay now also offers a global card that is accepted in over 185 countries. For this, RuPay joined hands with JCB international in July 2019.

All in all, whichever card you may decide to use, be mindful of the fact that it doesn’t harm to hold multiple cards for a greater acceptability and flexibility.

First Published: 27 Nov 2022, 01:59 PM IST