Mastercard raises concern on growing RuPay

It is always a pride that PM Narendra Modi is promoting the home grown RuPay as much as possible, reason is the commitment of the government for promoting and protecting Indian products and services, Mastercard has complained to the US government United States Trade Representatives (USTR) ,regarding PM Narendra Modi’s favour of RuPay’s payment network.

Mastercard told the United States government ,that Prime Minister Narendra Modi was using nationalism to promote the use of domestic payments network RuPay, and New Delhi’s protectionist policies were hurting foreign payment companies.

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, and that 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.

The global payments firm are upset about the fact that their potential benefit from this growth is being curbed by the government with their promotion of domestic products. One of the indirect moves ,which gave a good push to RuPay, that Modi government used to increase the usage of RuPay was through starting a financial inclusion campaign and making banks issue only RuPay cards to new customers.

The company argued with Modi’s promise of RuPay having a lower pricing than Mastercard by saying that this was a false promise. However, due to RuPay’s increasing use due to its lower transaction rate, both Visa and Mastercard also had to lower their respective transaction rates to stay in the competition.