India’s largest, and world’s 2nd largest card processing company has created ripples all across, by slashing their fees for debit card transactions by 95%.
Directly targeting RuPay, Visa has slashed the maximum charges in the sub-Rs 2000 bracket of debit card transactions, which indicates their aggressive stand.
In the past, we have shared how Visa and Mastercard have opposed RuPay’s rise due to Govt’s partiality towards them.
Now, it seems that Visa has decided to take the competition head-on.
Will Mastercard follow suit?
Visa: 95% Debit Card Fees To Be Waived Off!
In a letter sent to all partner banks, Visa has declared that debit card processing fees have been cut by 95%. And as per ET, which has accessed the letter, the maximum fee cut has been announced in the sub-Rs 2000 category.
Recently, Paytm too has announced their foray into card processing niche, and have rolled out a massive number of PoS machines for merchants.
In a statement, Visa spokesperson said,
“Visa has revised its data processing fees to encourage everyday digital payment usage across consumer and merchant categories,”
Visa’s plan too, is to bring small merchants on-board and empower them to receive debit card payments via their own payment processing network.
Paytm, on the other hand, uses RuPay’s payment processing mechanism, and offers their digital debit cards.
The Battle For Digital Transactions Warm Up!
India is a red-hot market for digital transactions, and by 2025, it is expected that Indians will transact $1 trillion worth of digital transactions.
Visa and Mastercard, the traditional cashless payment processors are facing the heat from not only RuPay but also mobile wallets like Paytm and Freecharge.
Considering that debit cards account for 96% of the card usage in India, but contributes only 49% in terms of the value of transactions, the battle for digital supremacy has narrowed down to debit card transactions.
Compared to 867 million debit cards, there are only 37 million credit cards, but these 37 million credit cards account for 51% of overall transaction value.
Now, after Visa has slashed the debit card fees, it would be only 15 paise for sub-Rs 2000 debit card transactions, and Rs 1.5 for more than Rs 2000 transactions via debit cards.
It would be interesting to observe, how Mastercard responds to this aggressive stand by Visa, and whether RuPay would be able to match the reduced charges.
For the consumers, less debit card processing fees by Visa means cheaper digital transactions.
We will keep you updated, as we receive more updates.