Why the RuPay Card Launch in Bhutan Will Benefit Digital Payments in India

RuPay Card Launch in Bhutan Will Benefit Digital Payments in India

The RuPay card – India’s very own Visa and MasterCard has made its way into Bhutan. The RuPay Card launch in Bhutan was inaugurated by India’s PM, Narendra Modi and Bhutanese PM, Lotay Tsherin. Modi launched the RuPay Card in Bhutan by making the first transaction at the Simtokha Dzong, one of the oldest dzongs in Bhutan.

The RuPay card has gone international before. Currently, it is functional in Maldives and Singapore. The Prime Minister said in a statement that he hopes introducing the RuPay card in Bhutan will help strengthen economic and cultural ties between both nations.

During his two-day visit, Modi signed 10 MoUs with Bhutan. With the RuPay card launch in Bhutan, Modi hopes to boost digital payments across borders too.

Before we understand how this can help boost digital payments, let’s understand a few basics.

What is RuPay Card?

RuPay – a combination of Rupee and Payment is an Indian version of credit/debit card. It is very similar to international cards such as Visa/Master.

NPCI launched the RuPay card scheme in May 2012. The motive behind launching RuPay in India? RBI wanted to have a domestic, open and multilateral system of payments. Over a span of 7 years, RuPay card transactions grew faster than overall debit card use, indicating wider and faster adoption of the domestic card payment system.

RuPay is run by the National Payments Corporation of India and competes with other global card payments systems such as Visa and Mastercard.

RuPay Card crossed 1 billion transactions – both online and offline merchant payment modes in the financial year 2019. This is a nearly 70% jump compared to the 667 million transactions last financial year!

RuPay debit cards are accepted in over 10,000 e-commerce sites and more than 8 lakh POS terminals. Since all the processing is done within the country this ensures faster transactions as compared to other debit cards in the market.

The RuPay Card Launch in Bhutan

The RuPay Card Launch in Bhutan will be done in two phases:

First: India’s banks will issue RuPay cards that can be used by Indian travellers in Bhutan

Second: Banks of Bhutan will be empowered to issue RuPay cards to Bhutanese citizens to use in India

India will provide an estimated ₹2.7 crore to integrate the RuPay Card in Bhutan. Why? Because it can benefit Digital Payments in India:

1. Boost Tourism and Digital Payments: As per the RBI and the Royal Monetary Authority of Bhutan (RMA), the RuPay card launch in Bhutan is set to simplify cross border transactions. Besides boosting tourism, this increased digital payments across countries, travel businesses and hotels.

2. Minimise Foreign Currency Outflow: Post-integration, RuPay cardholders can use their cards across all ATMs and POS terminals in Bhutan. The RMA maintains an account with SBI (State Bank of India). When a RuPay cardholder in Bhutan makes a payment, it will be settled into the RMA account.

3. Strengthen the Rupee: Visa and MasterCard payments are settled in US dollars, while RuPay transactions are settled in Indian rupees. The Bhutanese currency (Ngultrum) is fixed at a one-to-one exchange rate with the Indian rupee making settlement easy for both countries. In addition, Bhutanese banks will issue RuPay cards that will allow Bhutanese cardholders to access the RuPay network in India.

 

How to use RuPay for international payments?

RuPay Debit cards transaction charges are only 0.01% of the total amount, whereas Visa or Mastercard charges much more. This is why NPCI is pushing to make RuPay available across all international platforms like Netflix, Prime that still accept only Visa or Mastercard.

Rupay cards work similar to the other gateway access providers like Visa or Mastercard, but the transaction processed and settled in India. The transaction is settled quicker to the merchant account and there is no outward flow of US dollars since processing is done in India.

If you want to make International payments using the RuPay card, you need to issue for a RuPay global card. The RuPay Global Card has two types:

RuPay Global Classic Debit Card and the RuPay Global Platinum Debit Card.

Both cards are globally accepted and this premium debit card issued by Indian Banks with high annual renewal fees.

You can allow your customers to pay you with RuPay cards on Instamojo too. With Instamojo payment links, your customer can pay you using any mode – Debit/Credit Cards, NetBanking, Wallets, UPI and NEFT.

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