Can India Break Dominance Of VISA-Mastercard

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In the aftermath of similar US sanctions in 2014, where card networks like Visa and Mastercard had denied services to Russian banks, Moscow formalised its own payments system Mir, which was launched in 2015.
Also, Russia’s central bank & other banks issued cards using China’s UnionPay, a payments system which is enabled in 180 countries.

Modi govt’s unhappiness with Western networks VISA & Mastercard is well known since 2018, especially over sharing processing fees with foreigners.
Since 2015, with active state patronage, RuPay has issued more than 600 million cards, giving it a 60%-plus share in India in late 2020, up from just 15% in 2017.

Visa & Mastercard allege that RuPay has state patronage due to which it is expanding very fastly.
- RuPay comes comes under the Zero-MDR norm by the Indian government, which means no fees can be levied to merchants for transactions on these networks.
- Additionally, operating costs are lower for banks while using RuPay versus global networks. Banks issuing MasterCard and Visa cards pay a quarterly fee to be on their network.
Master card way back in 2018 complained to USTR that PM Modi has associated the use of RuPay cards with nationalism. Protectionist measures of RuPay can be detrimental for global players.
Visa Inc had also ‘complained’ to the US government that the Indian government’s promotion of RuPay is hurting Visa’s prospects in the country.