Banking is our day to day need of life. We make use of the banking service to withdraw and deposit our money, or to take loan. Banks have issued Debits card to its customers so that they do not have to visit the bank branches or to stand in long queue for regular jobs. The ease at which we are operating our banking services now, was not feasible without the interference of Network Company. In beginning when banks introduced the debits card facility, the customers faced a lot of problem. Specifically, when they have to carry out non-banking transaction.
Non-banking means, having account in one bank and ATM of other banks. It was a regular problem faced by many customers while withdrawing money as well as while doing the shopping. To resolve the persisting problem Network Company comes into picture.
Network company means the Visa, Mastercard, Amex etc. Indian network company is called as Rupaye. Long time ago, when ATM’s were introduced in the banking system, a customer can withdraw money from the ATM of the same bank in which they hold the account. Even though the technology of debit card and ATM were same for every banks the were unable to avail the services. If banks wanted, they could allow the customers to use each other ATM’s. But they were not allowing to use it, because of possible data theft and customer poaching from one bank to another. No business will share its customer data with its competitors, because the risk of losing their customers were high. It was a genuine fear among the different banks.
This makes way for “Network company” to comes into our Banking system. It is kind of loss to every Bank as multiple ATM’s machine have to installed within the country, which require huge investment in logistics and infrastructure. These network company come up with the suggestion that, instead of sharing the customer details amongst themselves rather give these details to them. They act as a mediator and provide third party services and insure secured services.
They introduce the policy that the network companies will going to verify the customer details, and as soon as the details were verified, allow each other bank to perform transaction at each other ATM. This will allow the customer details to be safe and also they are not going to share them with any other party. The data remain secured with these Network Company. This proposal was accepted by every banks. Since then, a customer can withdraw money and make use to ATM facility from any banks ATM’s with any bank Debit card. Similarly, they can make use of the Credit card from any bank and the shopkeeper / merchants has machine of any bank, it works in everything.
To facilitate data safety, the government has imposed this rule that these companies which are mostly of US origin will have to keep the data in India. That is why their data center are in India.
The vast system operated by these Network company allow Visa /Mastercard or Amex card holders to make transaction all over the world. Any bank in the world will verify our data with the network company and let us to make the transaction.
This will certainly make the customer services more convenient and affordable. Also, we make use of Debit cards anytime anywhere, and no more keep looking for same branch ATM. Hope the explanations is meaningful and I manage to make the concept clear.
