Card transaction fees to drop in India

All card transactions processing in India will now be made within the country. Previously such kind of financial operations were carried out by foreign companies abroad. The shift is expected to be performed over the next few years starting the following year. All domestic transactions will be managed by India Pay with the initial focus on ATMs.

According to the information provided by the sources in the Indian Banks’ Association which is also participating in the project, India Pay will work with payment networks like Visa and MasterCard for international transactions undertaken by Indian cardholders or foreigners on visit to the country. Once the processing operations shift completely to India the transaction costs will be significantly reduced. Besides, the profits from the fees will go to the Indian company which implies savings in foreign currency.

By the moment for these purposes National Payment Corporation of India was created. This institution will focus on three strands’ electronics payments, ATM transactions and processing of card payments, as reported by IBA deputy chief executive K Unnikrishnan. At the moment the Corporation is seeking to establish a management team and appoint a CEO. The company’s initial capital base will be Rs1 billion with the authorized capital of Rs3 billion. The stake in the company was picked by nine banks including State Bank of India, Bank of India, Bank of Baroda, Punjab national Bank, ICICI Bank, HDFC Bank, Citi Bank and HSBC.

Source: Business Standard