US Visa, Mastercard losing market to India's own RuPay card, UPI: FM
New Delhi: Finance Minister Arun Jaitley said Thursday global payment gateways like Mastercard and Visa are losing market share to indigenous RuPay card and UPI payment system.
In a Facebook post marking the second anniversary of demonetisation, the minister said note ban has increased digital transactions.
"Today, Visa and Mastercard are losing market share in India to indigenously developed payment system of UPI and RuPay card whose share has reached 65 per cent of the payments done through debit and credit cards," Jaitley said.
Unified Payment Interface (UPI) was launched in 2016 involving real time payments between two sets of mobile holders. Its transactions have grown from Rs 50 crore in October 2016 to Rs 59,800 crore in September 2018.
Besides, the Bharat Interface for Money (BHIM) app developed by National Payments Corporation of India for quick payment transactions using UPI, is currently being used by 1.25 crore people.
The value of BHIM transactions has gone up from Rs 2 crore in September 2016 to Rs 7,060 crore in September 2018. The share of BHIM transactions in overall UPI transactions is at about 48 per cent in June 2017.
RuPay card transactions have increased from Rs 800 crore before demonetisation to Rs 5,730 crore in September 2018 for transaction through Point of Sale (PoS) . For e-commerce purchases, it has gone up from Rs 300 crore to Rs 2,700 crore.
Meanwhile, a study by market research firm Velocity MR shows that a majority of transactions on e-wallets in the country are used for mobile recharges and paying utility bills. The study — which was based on a sample size of 2,455 respondents from cities like Delhi, Kolkata, Bengaluru and Pune — said approximately 9 out of every 10 e-wallet transactions are used to do mobile recharges, followed by paying the utility bills (8 out of 10).
It added that apart from e-wallets, consumers also prefer using debit/credit cards, internet banking, etc as a mode of payment for digital transactions.
"The usage of credit cards, 3 out of every 4 is observed to be the highest among the people who have monthly personal income between Rs 1.5 to 2 lakh, whereas people having a monthly personal income around Rs 75,000 mostly prefer to use debit cards..." said the study, which coincides with the second anniversary of demonetisation.
According to Velocity MR Managing Director and CEO Jasal Shah, smartphone growth wave and the favourable regulatory environment from RBI has pushed up online payments significantly, moving the economy into a "less-cash and transparent state.
"Significant investments in the form of cash back and innovations, like one-click payments, pay anytime anywhere have helped merchants and customers to adopt mobile wallets to save costs as compared to other digital payment methods. With the push from government and innovations, mobile wallets are expected to grow further in near to mid-term," he said.
He pointed out that mobile digital payments have increased rapidly post demonetization and mobile wallets have contributed immensely in this direction.
The government had on November 8, 2016, announced a ban on old 500 and 1000 rupee notes, to curb black money in the system.