The country-owned payment networks of Unified Payment Interface (UPI) and Rupay card have consolidated its market share against foreign counterparts such as Mastercard and Visa.
Visa and Mastercard are losing market share in India to indigenously developed payment system of UPI and Rupay Card whose share have reached 65% of the payments done through debit and credit cards, said Finance Minister Arun Jaitley on a social site post.
While UPI provides facility to transfers funds between two accounts linked to mobile phones, Rupay allows payment between banks and merchants for purchases made with credit and debit cards.
Launched six years ago, Rupay gained prominence during the start of the prime minister’s flagship account opening programme Jan-Dhan Yojna.
RuPay claims to cater to the customers of international banks, including private, cooperative and regional rural banks customers. This brings the total number of banks issuing RuPay cards to over 1000.
The Rupay Card is used both at the Point of Sale (PoS) and for e-commerce.
Its transactions have increased from Rs. 8 billion before Demonetisation to Rs. 57.3 billion in September 2018 for PoS and from Rs. 3 billion to Rs. 27 billion in e-commerce, added Jaitley.
In comparison to its international rivals, Rupay is more cost-effective. Four months ago, Visa had cut the charge levied on domestic debit card transactions to keep up in the Indian market, where it is fast losing market share to domestic players.
Whereas UPI, which is just two years old, transactions have grown from Rs. 0.5 billion in October, 2016 to Rs. 598 billion in September, 2018. The BHIM app transactions have also gone up. Used by 125 million people, the value of BHIM transactions has gone up from Rs. 0.02 billion in September, 2016 to Rs. 70.6 billion in September, 2018.
The share of BHIM transactions in overall UPI transactions is at about 48% in June, 2017, Jaitley said.
Among various things to promote digital payments, the govt had incentivised digital payments made through Bhim app and Rupay card a few months ago.
In June this year, Prime Minister Narendra Modi had appealed to the citizens of the country to serve the nation by using Rupay debit/credit cards. Mastercard had complained to the US government about Modi using nationalism to promote a local rival.
In February this year, Visa and Mastercard were first reported to have been losing market share to UPI transactions that reached almost half the value of debit and credit cards swiped at stores.
Both the firms have not yet responded to Entrackr queries on their actual market share figures.