Visa Complains To US Govt That Indian Govt Is Unfairly Promoting RuPay; Demands Level Playing Field

Visa Inc has complained to the US govt that its business is getting affected by India’s backing of RuPay.

No Level Playing Field

While in public Visa has projected indifference to the rise of the domestic payments platform, in its complaint it has called out India’s “informal and formal” promotion of RuPay.

It says that this has hurt its business in what it considers a key market.

Visa had expressed concerns over a “level playing field” in India or the lack thereof back in August when it met the U.S. Trade Representative (USTR) Katherine Tai and company executives, including CEO Alfred Kelly.

Unfair Promotional Tactics

Mastercard had also brought up similar concerns in 2018 and also lodged a protest with the USTR that Modi was using nationalism to promote RuPay.

Prime Minister Narendra Modi fully backed RuPay and said that using the local cards is equivalent to national service for those who cannot serve in the defense forces.

This prompted a warning from then US Commerce Secretary Wilbur Ross on “discriminatory behaviour” by India against American companies.

Unsubtle Pressure On Banks 

Finance Minister Nirmala Sitharaman also called on all banks to promote RuPay as the only card.

She said at the 73rd annual general meeting of the Indian Banks Association (IBA) that Indians don’t need any card other than RuPay and that it should be the only card banks push to customers seeking a card. 

Visa Inc took umbrage at this remark, calling it a “not so subtle pressure on banks to issue” RuPay cards.

Market Presence

RuPay accounted for 63% of India’s 952 million debit and credit cards as of November 2020, a huge rise from just 15% in 2017.

RuPay may dominate in terms of number of cards, but most transactions still go through Visa and Mastercard.

RBI Directive And Bans

Mastercard and Visa consider India as a key growth market but were hurt by a 2018 central bank directive to store payments data “only in India” for “unfettered supervisory access”.

Mastercard has been banned indefinitely from issuing new cards in India after the central bank said it was not complying with the directive.