India’s finance minister said on Thursday that Mastercard and Visa were losing market share to domestic payments networks, months after Mastercard complained to the U.S. government that Indian Prime Minister Narendra Modi was using nationalism to promote a local rival.
Finance Minister Arun Jaitley spoke about the surging growth of RuPay and Unified Payment Interface (UPI), which allows swift inter-bank fund transfers, on the second anniversary of Modi’s shock decision to replace high-value bank notes in a bid to flush out untaxed wealth.
Modi has said when Indians use RuPay they were serving the country as its transaction fees stay within India and could help build roads, schools and hospitals, an endorsement that has worried Purchase, New York-based Mastercard, which is the world’s second-largest payments processor.
“Today Visa and Mastercard are losing market share in India to 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 about the various results of the note scrapping exercise, known as demonetisation.
Besides, the Bharat Interface for Money (BHIM) app developed by National Payments Corporation of India for quick payment transactions using UPI, is currently being used by 1.25 crore people.
The value of BHIM transactions has gone up from Rs 2 crore in September 2016 to Rs 7,060 crore in September 2018. The share of BHIM transactions in overall UPI transactions is at about 48 percent in June 2017.
RuPay card transactions have increased from Rs 800 crore before demonetisation to Rs 5,730 crore in September 2018 for transaction through Point of Sale (PoS) . For e-commerce purchases, it has gone up from Rs 300 crore to Rs 2,700 crore.