India’s Digital Payments Revolution
As India’s digital payments become strategic assets, they provide a model for countries aiming to lessen their reliance on Western payment networks. Regulatory scrutiny on Visa and Mastercard has seen a rise globally. However, India’s approach introduces homegrown payment networks that outperform their international counterparts.
Shifting From Traditional Payment Card Networks
At the core of India’s strategy is the Unified Payments Interface (UPI)—a nine-year-old system that facilitates direct transactions between bank accounts through QR codes and phone numbers. According to Bernstein’s analysis, UPI, which handles about 71% of all transactions in India, now processes over 13 billion real-time transactions monthly and accounts for 36% of consumer spending in the country.
RuPay: India’s Homegrown Card Network
Building upon UPI’s success, the Indian government introduced RuPay, a local card network that holds the sole right to process credit card transactions through UPI. RuPay’s UPI credit card transactions in the first seven months of fiscal 2025 amounted to a transformative ₹638 billion ($7.43 billion)—almost twice as much as the previous year. This represented 28% of all credit card transactions in the country, a significant rise from the previous year’s 10%.
RuPay’s Attraction for Small Businesses
India’s push towards RuPay adoption used a low interchange fee model, particularly beneficial for small businesses. RuPay credit cards on UPI only charge merchants for transactions over ₹2,000 ($23.3). This appeals to small businesses, as the average UPI credit transaction is less than ₹1,000.
Shifting Landscape in Digital Payments
Given the local government’s strong advocacy and changing consumer preferences, international payment giants Visa and Mastercard are altering their India strategies, striking partnerships with fintechs to join the UPI revolution. However, the rapid growth of UPI has diminished the credit cards’ market share in India’s digital payments to 21% in 2024 from 43% in 2018. This change represents a tangible threat to Visa and MasterCard, who need to find a way to leverage this shift into an advantage.
Fonte original: Leia a matéria completa no TechCrunch
