Mastercard told the United States government in June that Indian Prime Minister Narendra Modi was using nationalism to promote the use of a domestic payments network.
And New Delhi’s protectionist policies were hurting foreign payment companies, a document was seen by Reuters showed.
Modi has in recent years backed India’s homegrown payments network “RuPay”, whose rise has broken the dominance of U.S. payment giants such as Mastercard and Visa.
More than half of India’s 1 billion debit and credit cards now go through the RuPay payment system. It means companies such as Mastercard face an uphill task to expand rapidly in one of the world’s biggest payments growth markets.
Modi has publicly endorsed the indigenous card payment network, saying using RuPay was like serving the country. As its transaction fee stays within India and could help build roads, schools, and hospitals.
That increased card usage: Indians in August clocked transactions worth $51 billion on debit and credit cards. It nearly double the amount recorded in November 2016.
According to data from the central bank which does not provide separate usage statistics comparing Indian and foreign payment networks.
Foreign card companies have also had to contend with a growing use of mobile wallets. It also includes state-backed digital money transfer services, some of which Modi promoted. RuPay received a major boost due they offered to Modi’s so-called financial inclusion programme launched in 2014. All it meant that all Indians opening a bank account for the first time a RuPay card. Not a Mastercard or Visa.
Prices & Charges Availibility
The pricing and charges are not publicly available. Modi in June said foreign card companies take their transaction fees abroad. “Everyone cannot go to the border to protect the country, we can use RuPay card to serve the nation”.
A month later, Mastercard issued a press statement which said the company gets only 15-20 percent of debit card transaction fees, while the rest stays “within the Indian economy”. It did not name RuPay.