Publicly Visa has downplayed concerns about the rise of RuPay, backed by Prime Minister Narendra Modi’s public lobbying that included comparing local card usage to a national service.
Visa Inc has complained to the US government of “informal and formal” promotion of India’s domestic payments rival. Rupee Hurts US giant in a key market, seen by memo Reuters Display.
Publicly Visa has downplayed concerns about the rise of RuPay, backed by Prime Minister Narendra Modi’s public lobbying that included comparing local card usage to a national service.
But the US government memo shows that Visa raised concerns about an “equal playing field” in India during a meeting on August 9 between company executives including US Trade Representative (USTR) Catherine Tai and CEO Alfred Kelly. .
Mastercard Inc. has privately raised similar concerns with USTR. Reuters reported in 2018 that the company filed a protest with USTR that Modi was using nationalism to promote local networks.
The USTR memo states, “Visa is concerned about India’s informal and formal policies that appear to be in favor of the business of the National Payments Corporation of India” (NPCI), the non-profit that runs RuPay, “others on domestic and foreign electronic payment companies,” the USTR memo said. Prepared for Tai before the meeting.
Visa, USTR, Prime Minister Modi’s office and NPCI did not respond to requests for comment.
Mr. Modi has promoted domestic RuPay over the years, challenging Visa and MasterCard in the rapidly growing payments market. RuPay accounted for 63% of India’s 952 million debit and credit cards as of November 2020, up from just 15% in 2017, according to the company’s most recent regulatory data.
Publicly, Mr Kelly said in May that there had been “considerable concern” for years that the choice of RuPay could be “potentially problematic” for Visa, but insisted that his company remained India’s market leader. Is.
“It’s going to be something that we’re going to have to deal with constantly and deal with over the years. So there’s nothing new there,” he said at an industry event.
‘Not so subtle pressure’
In his 2018 speech, Mr. Modi portrayed the use of RuPay as patriotic, saying that “not everyone can go to the border to protect the country, we can use the RuPay card to serve the nation.”
When Visa raised its concerns during the USTR’s gathering on 9 August, it cited the Indian leader’s “speech where he originally asked India to use RuPay as a show of service to the country”. ,” according to an email US officials exchanged on a readout of the meeting. ,
Finance Minister Nirmala Sitharaman said last year that “Rupay is the only card” that banks should promote. The government has also promoted RuPay-based cards for public transport payments.
While RuPay dominates the number of cards in India, most transactions still take place through Visa and Mastercard as most RuPay cards were issued by banks only under Mr Modi’s financial inclusion programme, say industry sources.
The USTR email showed that Visa told the US government that it was not concerned about India’s “emphasis on using RuPay-linked transit cards” and “such subtle pressure on banks” to issue.
Mastercard and Visa count India as a key growth market, but have been hit by a 2018 central bank directive to store payment data “only in India” for “unfiltered supervisory access”.
Mastercard faced an indefinite ban on issuing new cards in India after the central bank said it was not complying with the 2018 rules. A USTR official privately called the Mastercard ban “draconian”, Reuters Reported in September.
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