We all use Plastic money in form of Debit and Credit Cards. But do you know Visa and MasterCard are both payment systems, not credit cards in themselves. There are no significant differences between them. MasterCard and Visa are the names of the global companies who manage credit cards.
Why do we need this?
These companies developed and established the technological protocols that allow any card machine to accept any card regardless of the bank that has issued. Apart from this MasterCard and Visa payment services provide mainly two facility.
Security: These two service provider provide the credibility for the transaction. They perform their due diligence to ensure that the cards being used are not fake and the user does not have a bad financial history. This part however is secondary. RuPay does the same work in India.
Conversion: These two service provider also provide the facility of conversion between two currencies if you are transact between different countries or currency. Currently RuPay Card is not accepting worldwide therefore this service currently not working.
Why we should use RuPay Card instead MasterCard or Visa Cards?
These two companies charge percentage of sales for their network services for revenue, as every company work to generate revenue. We will discuss the benefits of RuPay Card over Visa and MasterCard.
To have a own network and reduce dependence of foreign companies
Visa and MasterCard are American companies therefore they have to work within the ambit of the american law and if USA government tell them to block a service they have to.
They did with Rossiya bank in Russia march 2016 because of Ukraine issue. Resulted Russian peoples are not able to transact money online, which is not less than any crisis as more people do transaction online.
To prevent any sort of interference the Indian government developed a backup. Therefore we should have own network to reduce dependence of foreign companies.
Thereby also reduce the outﬂow of precious forex
These companies being foreign will send their income back to USA which will be in form of USD. As we are second largest growing country online transactions are increasing. Specially after demonetization of Indian Govt. RBI wants to prevent this outflow of forex, therefore they developed RuPay network card in India.
Reduce cost to both banks and merchants
Since RuPay is India network it has a lower interchange or network fee. Which will cost less to banks which will reduce cost for both banks and merchants use swipe machine to transact these cards.