Mastercard complains to US govt about Indian PM's RuPay promotion

Mastercard complains to US govt about Indian PM's RuPay promotion

Mastercard has complained to the US government about the behaviour of Indian prime minister Narendra Modi, claiming that he is using nationalism to push the country's domestic payments network, hurting foreign rivals, according to Reuters.

Citing a Mastercard document sent in June to the Office of the United States Trade Representative, Reuters says that Mastercard is growing frustrated with Modi's support of the domestic RuPay payments network, to the detriment of Mastercard and Visa.

The note, sent by Mastercard VP, global public policy, Sahra English, says that the prime minister "associated the use of RuPay cards with nationalism, claiming it serves as ‘kind of national service’."

Said the note: "Increasing rhetoric from the prime minister and government mandates on promotion and preference for RuPay...continues to create market access issues for U.S. payments technology companies," adding "the Indian government’s preferential treatment of RuPay coupled with fallacies on pricing must be discontinued".

This is not the only issue that Mastercard and other foreign payments firms have had with India in recent months. Last month Visa, Mastercard, AmEx, PayPal and Amazon all struggled to meet the deadline to comply with new rules that require information about transactions in India to be stored in the country.

Developed by the National Payments Corporation of India (NPCI), RuPay has grown rapidly in recent years, partly as a result of a government decision to make sure that all Indians that open a bank account for the first time are offered a RuPay card, rather than one from Visa or Mastercard.

More than half of the country's one billion debit and credit cards now go through the NPCI's system, to the frustration of American firms eager to compete in a massive and fast growing electronic payments market.

In its note, Mastercard claims that the NPCI acts both as "a quasi-regulator and a competing payment network", and this has been "compounded by the government’s open preference for RuPay with misleading statements and inaccurate information on pricing, despite Mastercard being priced lower than RuPay".

In response to Reuters questions on the note, Mastercard says it "fully supports" the Indian government initiatives and is "deeply invested" in the country.

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Comments: (9)

Duane Tough
Duane Tough - PBATM - ny 02 November, 2018, 15:35Be the first to give this comment the thumbs up 0 likes

In Canada the Interac network went through the same thing....now their are dual bugged cards with Interac and (Visa or MC) that most bank account holders have.  We now have issues on the default network when it comes to online/ATM/CNP transactions.....btw- it took over 20 years for those bugs to get on the cards

Craig Lawrance
Craig Lawrance - Starkspur Ltd - Chalfonts 02 November, 2018, 15:591 like 1 like

this is a joke right?  Of course the current US govt isn't using Nationalism in any way, now is it?

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 02 November, 2018, 18:18Be the first to give this comment the thumbs up 0 likes

@Craig Lawrance: LOL:)

Philip Andreae
Philip Andreae - PA&A - Atlanta 02 November, 2018, 18:55Be the first to give this comment the thumbs up 0 likes

Interesting turn of competition.  National, regional and International payment schemes once were all about the the natural balance between domestic interests and the international value proposition for consumers.  

Csaba Czirjek
Csaba Czirjek - Cegeka - Hasselt 05 November, 2018, 08:38Be the first to give this comment the thumbs up 0 likes MC & Visa can’t get enough...greedy, greedy...
A Finextra member
A Finextra member 05 November, 2018, 09:40Be the first to give this comment the thumbs up 0 likes

IMHO If the card schemes get a real foothold in India it could easily spell the beginning of the end of the domestic card scheme. Look at what happened in the UK when MasterCard acquired 'Switch'. 

A Finextra member
A Finextra member 05 November, 2018, 11:281 like 1 like

@Craig Lawrence, @Ketharaman Swaminathan

I think the real joke is MC having the ...ahhh, temerity to accuse the India government of anything when it comes to building or maintaining a payment network.

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 05 November, 2018, 17:56Be the first to give this comment the thumbs up 0 likes

IMO, the UK situation is not applicable for India. V/MC have had more than a foothold in India for ages. RuPay is the new card network kid on the block and is the one that's gaining a major foothold - at the cost of V/MC. While anything is possible, I strongly doubt if V/MC will be able to acquire RuPay. RuPay is owned by NPCI, which is owned by a consortium of public and private sector banks and is effectively run by public sector agencies.

Duane Tough
Duane Tough - PBATM - ny 05 November, 2018, 18:26Be the first to give this comment the thumbs up 0 likes

https://www.reuters.com/article/us-india-data-localisation-mastercard/mastercard-says-storing-india-payments-data-locally-in-face-of-new-rules-idUSKCN1N4204

Looks like they are goign to start storing it in India

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