Payments giant Visa has complained to the US government stating that India’s ‘informal and formal’promotion of domestic payments rival RuPay is detrimental to the interests of the company in a key market.
According to a report in Reuters, the memos of the US government show that in a meeting between US Trade Representative (USTR) Katherine Tai and VISA executives, including CEO Alfred Kelly, the company had raised concerns about a ‘level playing field’ in India.
"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.
Interestingly, Mastercard had raised similar concerns privately with the USTR back in 2018.
RuPay, an Indian multinational financial services and payment service system, was conceived and launched by the National Payments Corporation of India in 2012. It has been supported by public lobbying from Prime Minister Narendra Modi posing a challenge to Visa and Mastercard in the fast-growing payments market.
RuPay accounted for 63 per cent of India's 952 million debit and credit cards as of November 2020, according to the most recent regulatory data on the company, up from just 15 per cent in 2017.
In public, however, Visa Inc has downplayed concerns about the rise of RuPay. At an industry event, Visa CEO Kelly stressed that his company remained India's market leader, despite concerns that RuPay could be "potentially problematic" for Visa.
"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 added.
Earlier in 2018, PM Modi, in a speech, had portrayed the use of RuPay as patriotic, saying that since ‘everyone cannot go to the border to protect the country, we can use RuPay card to serve the nation.’
In fact, Finance Minister Nirmala Sitharaman said last year that RuPay is the only card banks should promote. The government has also promoted a RuPay-based card for public transportation payments.