India Finance Minister Says Visa, Mastercard Losing Local Market Share

In the battle across India for consumer transactions, in the battle for hearts and minds and wallets, might Mastercard and Visa be losing share?

Reuters noted this week that, according to the country’s Finance Minister Arun Jaitley, those two payment giants are losing share to domestic rivals such as RuPay and the Unified Payment Interface (UPI), which the newswire stated allow for fast interbank transfers.

The minister said that when citizens use such domestic offerings, they are doing a service for the country because transaction fees stay within India’s borders, and can be used for local works, such as road building. The movement toward electronic payments and a greater embrace of payments networks comes two years after India’s government launched demonetization efforts.

RuPay accounts for more than half of India’s one billion debit and credit cards, and yet Mastercard and Visa still process the majority of the tens of billions of dollars in payments transactions logged monthly, and where the figure was $51 billion in August.

“Today, Visa and Mastercard are losing market share in India to [an] indigenously developed payment system of UPI and RuPay Card, whose share have reached 65 percent of the payments done through debit and credit cards,” Jaitley said in a Facebook post, as noted by the newswire.

Jaitley noted that the total transaction value for RuPay was $1.1 billion in September, or 84 billion rupees, up from 11 billion rupees before demonetization. UPI’s transactions had surged to 598 billion rupees in the same month, up from 500 million rupees in October of 2016.

Mastercard has said in the past that the government’s championing of domestic players, such as RuPay, was a form of nationalism, and where there are “protectionist measures” in place that exist to the detriment of companies like Mastercard, which of course compete on the world stage.