A number of Indian banks are reportedly looking into setting up a new payment system, India Pay, to rival those of international cards and payments behemoths Visa and MasterCard.
According to a report in the Business Standard, the formation of a domestic card payment alternative is being considered as a cheaper option for Indian banks, and comes as card transactions in the country are forecast to triple over the next five years.
It is believed that the India Pay system could collectively save Indian banks million of dollars each year in interchange fees, which are currently collected by Visa and MasterCard for all of the country’s card-based transactions.
The Indian Banks’ Association (IBA) has also reportedly stated that the domestic network could connect to MasterCard or Visa for international transactions, and possibly to other interbank networks such as China UnionPay.
Following discussions on the matter, the IBA is now at the stage of looking into whether a commercial model could be developed, Business Week reported. If such a system were to be built, it would represent a significant undertaking requiring substantial investment.