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Jaitley says Mastercard, Visa losing out to local players in India

Reuters  |  NEW DELHI 

By Aditya and N. Das

NEW (Reuters) - India's minister said on Thursday that and were losing market share to domestic payments networks, months after complained to the that was using nationalism to promote a local rival.

Minister spoke about the surging growth of RuPay and Unified Payment Interface (UPI), which allows swift inter-fund transfers, on to replace notes in a bid to flush out untaxed wealth.

Modi has said when Indians use RuPay they were serving the country as its transaction fees stay within and could help build roads, schools and hospitals, an endorsement that has worried Purchase, New York-based Mastercard, which is the world's second-largest

"Today and are losing market share in to indigenously developed payment system of UPI and RUPAY Card, whose share have reached 65 percent of the payments done through debit and credit cards," Jaitley said in a post about the various results of the note scrapping exercise, known as demonetisation.

declined to comment. Mastercard did not respond to an email seeking comment.

RuPay process payments between banks and merchants for purchases made with credit or debit cards, while UPI instantly transfers funds between two accounts linked to

BACKLASH

Jaitley was referring to the volume of transactions, not the value.

Though RuPay, owned by many Indian and foreign banks, accounts for more than half of India's 1 billion debit and credit cards, industry sources say Visa and Mastercard still process the vast majority of the value of payments transactions in the country. Indian payments transactions were worth $51 billion in August, according to central

Jaitley said RuPay's total transactions had leapt to 84.3 billion rupees ($1.16 billion) as of September, from 11 billion rupees before demonetisation. Total transactions done using UPI had jumped to 598 billion rupees ($8.26 billion) from 500 million rupees in October 2016, around the time it was launched.

reported last week that Mastercard complained to the Office of the Trade Representative on June 21 that Modi "associated the use of RuPay cards with nationalism, claiming it serves as 'kind of national service'."

The Mastercard note said that while Modi's digital payments push was "commendable", the had adopted "a series of protectionist measures" to the detriment of global companies.

The story sparked a backlash on against Mastercard in India, one of the world's biggest payments growth markets.

Several people said on they had asked their banks to replace their Mastercard with RuPay, with some using the hashtag #BoycottMastercard to voice their concerns.

One user posted a picture of a Mastercard cut into pieces, while another named Ramesh uploaded a graphic with a Mastercard logo on a toilet flush. A arm of Modi's ruling party, the Bharatiya Janata Party, said he had asked his bank to cancel his Mastercard and switch to RuPay.

Mastercard did not respond to Reuters' emailed request for comment on the backlash.

Ashwani Mahajan, who heads an group, Swadeshi Jagran Manch, which is linked to the ideological parent of Modi's party, said on Thursday that companies such as Mastercard should be "competing with RuPay, not complaining to the U.S. government".

"They have enjoyed their market share for so long, we have the right to protect and promote our interests," Mahajan told

($1 = 72.4000 rupees)

(Reporting by Aditya and N. Das; Editing by Martin Howell and Muralikumar Anantharaman)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Thu, November 08 2018. 16:08 IST
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