Even as the digital payments conglomerate Visa pooh-poohs any threat to its leadership position in the Indian market by the indigenously developed payments solution provider RuPay, privately, it has complained to the US government that the Indian government’s “informal and formal” promotion of RuPay is hurting its market share, according to a report by Reuters citing US government memos.
According to the memos, Visa’s grudge stems from the push RuPay has received from none other than PM Narendra Modi who has likened its use to national service, saying in a 2018 speech that since “everyone cannot go to the border to protect the country, we can use RuPay card to serve the nation.” Visa, which asked for a “level playing field” during a meeting with USTR Katherine Tai, which included Visa CEO Alfred Kelly, cited Modi’s speech to support its charges.
The push by the government has seen Rupay’s share zoom from 15% in 2017 to 63% of the 95.2 crore debit and credit cards — amounting to 60.36 crore — issued till November last year, as per an RBI report. In fact, a brute majority of these were debit cards since only 970,000 Rupay credit cards were issued. In the credit card business though, Visa leads with a 44% market share followed by Mastercard, with a 37% share.
Visa’s grudges against RuPay were similarly echoed earlier by Mastercard in 2018, which had privately raised the issue with the USTR, alleging that Modi was using nationalism to promote RuPay. The company in fact was handed a ban on issuing new cards for not complying with a 2018 directive by the RBI asking it to store all payments data from India “only in India” for “unfettered supervisory access” — a ban that was labelled “draconian by a USTR official in private.
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