Further cut possible as more customers use cards, says MD
The National Payments Corporation of India (NPCI) has cut the switching fee it charges banks for processing inter-bank ATM transactions by five paise to 45 paise a transaction with effect from May 1.
This comes on the back of ATM transaction volumes rising to about 27 crore a month from eight crore five years back.
NPCI last cut the switching fee to 50 paise from ₹1 for processing inter-bank ATM transactions through its National Financial Switch about four years back.
Currently, each time a customer of ICICI Bank, for example, withdraws cash at the ATM of HDFC Bank, ICICI has to pay HDFC a transaction fee of ₹20. Further, ICICI Bank has to pay NPCI a switching fee of ₹0.45.
Meanwhile, speaking after the launch of State Bank of India’s RuPay Platinum Debit Card, Abhaya Prasad Hota, MD and CEO, NPCI, said that out of the 40 crore-odd debit cards in circulation, almost 16 crore have been issued in association with RuPay.
Of this, almost 69 per cent have been issued by banks to customers who have opened accounts under the Pradhan Mantri Jan Dhan Yojana.
“Once these customers start using their cards and more banks issue RuPay cards, we will be in a position to cut the switching fee further,” said Hota
Dilip Asbe, Chief Operating Officer, NPCI, said his company will be in a position to support banks for issuing international RuPay debit cards from July onwards. Further, Indian banks will be able to issue international RuPay credit cards in association with Discover Financial Services by March 2016.
Meanwhile, Hota said banks are likely to seek an extension of the date from the government to implement full interoperability of micro-ATMs.
Banks were to implement this by May 2015. The NPCI chief now expects banks to complete this exercise by July 2015. There are 1.30 lakh micro-ATMs in the country.
SBI’s Platinum card
State Bank of India on Thursday launched RuPay Platinum debit card in association with National Payments Corporation of India. The new card targets the affluent customer segment by offering benefits such as 5 per cent cash back on utility bill payments; up to 1 per cent fuel surcharge waiver; and personal accidental death and permanent total disability insurance over of ₹2 lakh.