The Credit Cards in India are associated to International Cards like:-
- Master Card and
- American Express.
As per the ‘RBI Annual Report’, the value of credit card transactions were Rs 65,356 crores in the year 2008-09. Almost Rs 60,000 crores was settled outside India through Visa and Mastercards last year, which act as the payment link on behalf of the bank, merchant and card holder. The Debit card transactions amounted to Rs 18,547 crores in 2008-09.
There is a need to have a domestic Payments-Cards system in India, because of:-
- The high cost borne by the Indian Banks for the affliations with the above International cards and
- the connection with international card associations resulting in the need for routing even domestic transactions, which account for more than 90 per cent of the total, through a switch located outside the country.
Reserve Bank of India is planning to have a domestic Payments-Card to handle the Credit/Debit Cards Transactions. The Indian Banks Association (IBA) is also in favour of setting up a Domestic -payment card.