Prime Minister Narendra Modi’s speech on emergence of RuPay cards at the Delhi Economics Conclave hinted RuPay could end the dominance of MasterCard and Visa.
Apparently, the National Payments Corporation of India (NPCI) is also looking to promote RuPay, which is an alternative to MasterCard and Visa.
The competition in debit and credit card space, which is dominated by the international market, can take India a long way. In this regard, RuPay, which was launched in 2012, has done well for itself, as reportedly 36% of debit cards in India is RuPay, claimed by Modi.
ET reported that following the initiatives of the government on financial inclusion, the NPCI, jointly owned by banks, is making strong headway in the business.
AP Hota, MD and chief at NPCI, told ET, “We have one-thirds market share and it is growing gradually. We have 20% market share in transactions and that percentage is growing month-on-month. Every day there are 10 million transactions done via cards and RuPay is at 2 million and picking up.”
Modi’s Jan Dhan Yojana gave RuPay a new lease of life as out of 222 million RuPay cards in circulation, nearly 170 million are linked to Jan-Dhan accounts and only 52 million cards are mainstream as of October.
However, RuPay still has a long way to go as they are used for 20% of the overall transaction of more than 2 million a day.
Experts point out that that market should be competition driven than mandate-driven competition.
As per reports, for every point of sale and e-commerce transaction RuPay charges a fixed fee of 90 paise – 60 paise from the issuing bank and 30 paise from the acquiring bank, while Visa and MasterCard would charge Rs 3 per transaction.
“The government wanted PMJDY cards to be done in a period of one year and we gave 170 million cards. I wonder if Visa and MasterCard could have achieved this. The government wanted us to do Mudra cards. In just one week we did the design, issuance and product rollout of the cards.Who could have done this? I wonder if they (Visa and MasterCard) could have done this within 6 months,” said Hota.