Used as a major tool in the execution of government’s ambitious financial inclusion programme, Pradhan Mantri Jan-Dhan Yojana, RuPay debit cards currently account for nearly 35 per cent cards market share in India. Going by the latest RBI figures, there are 22 crore RuPay cards in operation in the country and growing at an incredible pace.
Alarmed by the unprecedented rate of growth of RuPay cards, several existing market players like Visa and MasterCard have accused the government of adopting monopolistic practices by using its influence. If the government does not allow a level playing field, RuPay cards will kill the competition, they have pointed out.
A senior Visa official said that the reason for the exponential growth of RuPay cards does not lie in the fact that it is cheap, but because it is being backed and promoted by the government itself. “NPCI can claim to have issued millions of cards, but the fact is that not even half of the cards issued are being used,” he underlined.
According to Visa, this does not augur well for the future of the cards market, as the market can never thrive on monopoly. “It does not benefit the market in anyway because they are not being used,” said a Visa official.
In strongly worded statements, both MasterCard and Visa have directly accused the Government of using its influence, reach and power to increase the spread of RuPay cards — something they are finding difficult to fight against.
By lowering transaction fees by 30 per cent by issuing an unspoken ‘mandate’ to all banks for spread of RuPay cards, they are losing out in the fight, they said adding that it is monopoly that they are afraid of more than the competition.
Visa has requested for a level playing field for both government and private enterprises to survive and work. “Our pricing structure is lower than RuPay on some counts, but due to the ‘mandate’ from the government, more RuPay cards are being issued than it would have been naturally,” said another Visa official.
They have approached the government and RBI in this regard.
