Visa, Mastercard, American Express and Discover currently dominate the international card networks market globally. While all of these provide good services to their customers, they are based in and operate out of the US, which increases the dependency of all countries on the states. Keeping that in check, countries like Russia and China have developed their own card networks: Mir and UnionPay Co, respectively. India is not behind and has its own homegrown card network, promoted by the National Payments Corporation of India, called RuPay. Also Read - WhatsApp will now use your 'legal name' for UPI payments: How to find out yours
RuPay has been pushed extremely hard in the country, and companies like Visa have filed complaints with the US government about the lack of an even playing field in India, according to a report by Reuters. However, even after such a massive push, Visa, Mastercard and other American card networks continue to dominate the Indian market. Also Read - How to change your UPI PIN using Google Pay app
The boycott of Russia due to its ongoing Ukrainian invasion, could bring a surge for RuPay, but will it be enough to bring the network into the major leagues? Or will it continue to be a minor local alternative in India? Also Read - Mann ki Baat: PM Modi urges people to go for a ‘Cashless Day Out’
Can RuPay take on major American international card networks?
RuPay, according to RBI in 2020, had issued over 600 million cards. Most of these cards are debit cards, which are not linked to any incentives or benefits. This number has also been achieved by a push to the poorer sections of society as part of the government’s financial inclusion campaign.
According to Reuters, Visa currently holds a market share of 44 percent in India, followed by Mastercard at 36 percent and RuPay along with others at 20 percent combined. However, Visa seems to be concerned considering that it is losing its ground in a number of markets as they create their own national payments systems.
Apart from RuPay, these companies are also losing ground to India’s UPI service, which the country is looking to also expand into the credit economy. The service is already hosting credit cards to make payments, and might soon open up to adding users’ credit accounts directly with banks.
Another issue that people will face for shifting to RuPay is its international transaction acceptance rate. NPCI has confirmed that it has already set up a dedicated entity to internationalise RuPay. If the country manages to sign-on partners, it will be termed as a major win, as RuPay cards will then become more acceptable internationally. As of now, RuPay does have some acceptance in foreign markets, thanks to a partnership with Discover Financial.
While it is going to be a major uphill battle for RuPay to come anywhere close to the majors like Visa and Mastercard, UPI is growing rapidly in the country. Besides RuPay, the government is also heavily pushing UPI, and has signed a deal with Dubai’s Mashreqbank PSC to let Indians who visit the Gulf emirate annually use UPI.
According to RBI, UPI transactions back in 2021 UPI transactions surpassed credit and debit card transactions by a huge margin. UPI person to person transactions amounted to Rs 6,691.3 billion, UPI person to merchant transactions amounted to Rs 1,577.2 billion. Credit card transactions amounted to Rs 939.1 billion and debit card transactions amounted to Rs 675.9 billion.
To bolster RuPay, India could not be looking to stitch country to country deals, and instead could opt for Nexus, which is the Bank for International Settlements’ blueprint for 24/7, real-time cross-border payments. This prototype was developed by NPCI and the Monetary Authority of Singapore. Nexus would link up digital payment systems of the over 60 nations as a world wide web of payments.