India’s RuPay gave the scare to Visa and Mastercard. Mastercard recently complained to the office of US Trade Representatives and protested that the Indian government associated the use of RuPay cards with nationalism, claiming it enables as a kind of national service.
Mastercard added that the Indian government had adopted a series of protectionist measures harmful to global companies. The question is why the global leaders having market dominance, technological superiority, and decades of experience are scared of a six-year-old Sarkari project. Gradually RuPay card has been dominating the Indian market supported by the government. This along with Prime Minister’s policy of financial inclusion, RuPay has made quick progress into the rest of the land. In India, the duopolistic industry has already been dominated by Visa and Mastercard. In 2015 in a conclave, Modi had spoken about the emergence of RuPay card as an alternative to Visa and Mastercard. RuPay cards enabled as to introduce healthy competition in the debit and credit card space which was dominated by a few international players. India’s total debit card volume is 925 million according to RBI. RuPay claims to power over 500 million cards issued by nearly 1100 banks. This gave it more than a 50% share in the countries debit card market by volume. This in effect beat the much older players, Visa and Mastercard.
In 2013 RuPay’s market share was as small as 0.6%. Then in 2009, the RBI called upon the Indian banks association to launch a not-for-profit company to design a rival card. For the time being this card came to be called India card, meeting the requirements of the domestic banks. India’s card was launched in 2012. When the government directed the issuance of RuPay cards to every account holder, this came as a big boost for RuPay cards.
For every account opened under the Prime Minister Jan Dhan Yojana, the issuance of RuPay cards was made mandatory. With the circulation of the RuPay card, it marked 459 million transactions in the financial year 2017-18. This was a sharp increase from 195 million last year. The number of RuPay cards touched 494 million in FY 2019. The result RuPay card will no more be no.3 but will become no.2 on the value, behind Visa and Mastercard. The government is moving towards a less-cash economy in the wake of demonetization. This has promoted RuPay cards in the interiors of the country as well.
