The card transactions in the country which are presently being processed overseas will soon be processed within the country in the coming few years.
The activity which is controlled abroad is expected to carry domestically as India Pay, a domestic payment system is likely to take over the charge in this regard. However the processing will take another four to five years, India Pay will be launched in the coming year.
The system will start its operations by focusing on ATM transactions. Thereafter over next four to five years, processing of credit card transactions will also be transferred to India.
Sources from Indian Banks' Association (IBA) informed that India Pay will take care of all the domestic transactions where as international transactions undertaken by Indian cardholders or by foreigners visiting the country will be controlled by working together with payment networks like Visa and MasterCard.
The processing cost connected with the card is expected to come down, once the processing is done in the country. Also the fee that would be earned by the firm will add on as savings in foreign currency. Presently the fee charged by Visa and MasterCard are relatively very high.
Even a company named National Payment Corporation of India has been registered to control the local processing of the cards. Deputy Chief Executive of IBA, K Unnikrishnan said the firm will control on three stands including electronics payments, ATM transactions and processing of card payments. The electronic payment systems such as electronic fund transfer that are presently handled by the RBI may also come under its control, said an official with IBA.
The company is expected to start with a capital base of Rs 100 crore and an authorized capital of Rs 300 crore. Some banks including State Bank of India, Bank of India, Bank of Baroda, Punjab National Bank, ICICI Bank, HDFC Bank, Citi Bank and HSBC have come forward to take a stake in the company. Meanwhile more banks are expected to come to as shareholders once the firm starts its operations.
The entity is also in the course of appointment of its chief executive officer and a management team.
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