Visa complains about India's backing of its domestic rival RuPay

In a complaint to the US government, Visa Inc has expressed concerns over India's "informal and formal" promotion of domestic payments rival RuPay that hurts the U.S. giant in a key market.

In memos raised, as shown by Reuters, Visa has downplayed concerns about the rise of RuPay, which has been supported by public lobbying from Prime Minister Narendra Modi that has included likening the use of local cards to national service.

U.S. government memos from an August 9 meeting between U.S. Trade Representative (USTR) Katherine Tai and company executives including CEO Alfred Kelly, show Visa raised concerns about a "level playing field" in India.

Mastercard Inc has raised similar concerns privately with the USTR. Reuters reported in 2018 that the company had lodged a protest with the USTR that Modi was using nationalism to promote the local network.

"Visa remains concerned about India's informal and formal policies that appear to favour the business of National Payments Corporation of India" (NPCI), the non-profit that runs RuPay, "over other domestic and foreign electronic payments companies," said a USTR memo prepared for Tai ahead of the meeting.

According to the most recent regulatory data, RuPay accounted for 63% of India's 952 million debit and credit cards as of November 2020, up from just 15% in 2017. Modi has been alleged to have promoted homegrown RuPay for years, posing a challenge to Visa and Mastercard in the fast-growing payments market.

Publicly, Kelly said in May that for years there was "a lot of concern" that the likes of RuPay could be "potentially problematic" for Visa, but he stressed that his company remained India's market leader.

"That's going to be something we're going to continually deal with and have dealt with for years. So there's nothing new there," he told an industry event.