Visa publicly has eased concerns about the rise of RuPay, backed by public lobbying from Prime Minister Narendra Modi Including comparing the use of a local card to a national service.
But US government memos show that Visa raised concerns about an “equal playing field” in India during an August 9 meeting between the US trade representativeUSTR) company executives including Katherine Tai and CEO Alfred Kelly.
master card Inc. has raised similar concerns privately with USTR. Reuters reported in 2018 that the company had filed a protest with the USTR that Modi was using nationalism to promote local networks.
“Visa is concerned about India’s informal and formal policies, which appear to be in favor of the business of the National Payments Corporation of India (NPCI), the non-profit that runs RuPay,” the USTR memo said. on other domestic and foreign electronic payment companies,” the USTR memo said. Prepared for Tai before the meeting.
Visa, USTR, Modi Office and NPCI did not respond to requests for comment.
Modi has over the years promoted Desi RuPay, a challenger to Visa and MasterCard in the fast-growing payments market. RuPay accounted for 63% of India’s 952 million debit and credit cards as of November 2020, up from just 15% in 2017, according to the company’s most recent regulatory data.
Publicly, Kelly said in May that there had been “considerable concern” over the years that the choice of RuPay could be “potentially problematic” for Visa, but stressed that his company remained India’s market leader. Is.
“It’s going to be something that we’re going to have to deal with constantly and deal with over the years. So there’s nothing new there,” he said at an industry event.
‘Not so subtle pressure’
In a 2018 speech, Modi portrayed the use of RuPay as patriotic, saying that since “not everyone can go to the border to protect the country, we can use RuPay cards to serve the nation.”
When Visa raised its concerns during the USTR gathering on 9 August, it cited the Indian leader’s “speech where he originally asked India to use RuPay as a show of service to the country,” According to an email, US officials exchanged the meeting. read out.
Finance Minister Nirmala Sitharaman said last year that “Rupay is the only card” that banks should promote. The government has also promoted RuPay-based cards for public transport payments.
Industry sources say that while RuPay dominates the number of cards in India, most transactions still take place through Visa and Mastercard, as most RuPay cards were only issued by banks under Modi’s financial inclusion programme. Industry sources say.
The USTR email showed that Visa told the US government that it was not concerned about India’s “emphasis on using RuPay-linked transit cards” and “such subtle pressure on banks” to issue.
Mastercard and Visa count India as a key growth market, but have been hit by a 2018 central bank directive that they store payment data “only in India” for “unfiltered supervisory access”.
Mastercard is facing an indefinite ban on issuing new cards in India after the central bank said it was not complying with the 2018 rules. A USTR official privately called the Mastercard ban “draconian”, Reuters reported in September.