US payment giant Visa has reportedly approached the US government over India’s ‘formal and informal’ support for domestic payment rival RuPay.
The payment giant said that the Indian government’s promotion of RuPay has been affecting its business in the country, Reuters reported citing a memo.
RuPay, run by the National Payments Corporation of India (NPCI), is said to be backed by public lobbying from Indian Prime Minister Narendra Modi.
PM Modi has been advocating the card for national and public services, including public transportation payments.
As of November last year, the card accounted for 63% of 952 million debit and credit cards in the country.
Visa, which has been quiet on the rise of RuPay in public, brought up its concerns about a ‘level playing field’ in India in a meeting that took place in this August between US Trade Representative (UTSR) Katherine Tai and company executives, including CEO Alfred Kelly.
“Visa remains concerned about India’s informal and formal policies that appear to favour the business of National Payments Corporation of India over other domestic and foreign electronic payments companies,” a USTR memo prepared for Tai ahead of the meeting stated.
Visa, USTR, Modi’s office, and the NPCI did not comment on the news.
In 2018, Mastercard also raised similar concerns with the USTR, alleging that PM Modi is using nationalism to endorse RuPay cards.
While RuPay dominates the Indian payment space in terms of the number of cards, a majority of transactions are said be made through Visa and Mastercard.
According to industry sources, RuPay cards were simply issued by banks as part of Modi’s financial inclusion programme.
Last year, Indian finance minister Nirmala Sitharaman said the ‘RuPay is the only card’ banks should promote.
Visa told the US government it was apprehensive about India’s ‘push to use transit cards linked to RuPay’ and ‘the not so subtle pressure on banks to issue’ RuPay cards, according to the USTR email.