India Seeks to Introduce RuPay Services in Sri Lanka, Facing Hurdles Over Transaction Fees
RUPAY Card: India is eagerly eyeing the launch of RuPay services in Sri Lanka, aiming to enhance business interactions and facilitate smoother transactions for tourists utilizing the RuPay card. Despite this ambition, challenges have arisen concerning fee agreements between Indian and Sri Lankan banks for RuPay transactions.
Challenges in Rollout
Persons familiar with the matter revealed that negotiations between Indian and Sri Lankan banks have stalled due to disagreements over transaction fees associated with RuPay cards. The Indian government is proposing to bolster digital payment connectivity with Sri Lanka, extending services beyond the already-established Unified Payments Interface (UPI) to incorporate mutually beneficial RuPay card services.
Government Initiatives
Government officials disclosed ongoing discussions to expand RuPay technology into Sri Lanka through NPCI International Payments Ltd (NIPL). Despite the absence of active engagements at present, central banks on both sides are actively involved in facilitating the introduction of RuPay services in Sri Lanka. This move is anticipated to streamline shopping experiences and ATM cash withdrawals in both nations.
Resolution on the Horizon
While hurdles persist regarding commission charges for digital transactions, sources indicated optimism about imminent resolution, potentially positioning Sri Lanka as the third country, following Bhutan and Mauritius, to accommodate both UPI and RuPay transactions.
Unanswered Queries
Efforts to obtain clarification from relevant authorities, including the Ministry of External Affairs, the Department of Financial Services, NPCI, and Sri Lanka’s High Commission, yielded no responses as of press time.
Current RuPay Reach
RuPay card services have already been introduced in Nepal, Bhutan, Mauritius, Singapore, and the United Arab Emirates, highlighting India's push to extend its financial network globally.
Background on RuPay
Developed by the NPCI, RuPay serves as India's indigenous payment network, aiming to reduce dependence on international card payment providers. It aligns with India's goals of transitioning towards a less-cash economy and enhancing electronic payment services offered by financial institutions.
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RuPay Statistics
With over 1,100 banks issuing RuPay cards, including private, public, and cooperative banks, RuPay has gained significant traction. The network boasts ten core promoter banks, with more than 750 million RuPay cards issued in India, accounting for over 60% of the country's total cards.
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