Things are heating up between payment network corporations as MasterCard continues to loose customers to the Indian Government backed RuPay Payment system after Prime Minister Narendra Modi’s aggressive promotion of the indigenous payment system. Reuters reported that Mastercard took to the United States government, back in June, claiming that the Prime Minister was using Nationalism as a reason to promote the homegrown Payment system.
It all started with Modi’s 2014 financial programme in which all Indians opening a bank account for the time were given RuPay cards and not Visa or Mastercard. Modi claims that usage of these RuPay helps the Indian economy as the transaction costs stay within the country and it could be useful in building roads, schools, and hospitals. “everyone cannot go to the border to protect the country, we can use RuPay card to serve the nation”, said Modi.
For MasterCard and Visa, who have maintained a monopoly in this sector at least in the global arena, tings have looked bleak at best in the subcontinent. More than half of the Debit and Credit card transactions are now being done through RuPay network. And moreover, RuPay isn’t the only competition Visa and Mastercard face. Post demonetization, the country has witnessed an enormous increase in the use of mobile wallets such as Paytm, PhonePe, Mobikwik, and other state-backed digital money transfer services.
In a note which was sent out by Sahra English, Vice President for Global Public Policy of the New-York based payment giant, which states that while the Prime Minister’s push for the homegrown payment system was commendable, the Indian government has adopted a series of protectionist laws which in turn harms global companies such as theirs. “Increasing rhetoric from the prime minister and government mandates on promotion and preference for RuPay … continues to create market access issues for U.S. payments technology companies,” Mastercard said in the note.
MasterCard is pulling all stops to maintain their revenue flow from India. Just before the start of the festive season this year, MasterCard roped in MS Dhoni as its brand ambassador hoping to encourage consumers in smaller cities to use their cards more often and even attract potential future customers.
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