RuPay Card Market Share Expected to Rise Following RBI Directive

In a move set to reshape the landscape of card payments in India, the Reserve Bank of India (RBI) has mandated banks to offer customers a choice between three card networks: Visa, Mastercard, or RuPay. This directive, effective from October 2024, is aimed at enhancing competition and empowering consumers.

According to experts in the banking industry, the implementation of this directive is expected to significantly boost the market share of RuPay cards in the coming months. Emkay Global, a renowned research firm, predicts that the newfound freedom of choice for customers will accelerate the acceptance of RuPay cards, both among consumers and card issuers.

The RBI’s decision comes after previous attempts to encourage card issuers to provide options to customers yielded insufficient results. The regulator emphasizes the importance of ensuring customers have a genuine choice in selecting their card network provider, as opposed to being limited by the preferences of card issuers.

One significant impact of this directive is expected to be on the earnings of card issuing companies. RuPay, known for offering lower fees to card issuers compared to competitors like Visa and Mastercard, stands to gain from increased adoption.

However, challenges remain, particularly concerning the international acceptance of RuPay cards. While tie-ups with global networks like Discover and JCB exist, the coverage remains limited compared to Visa and Mastercard.

Nevertheless, this directive marks a significant step towards promoting a domestic card network and safeguarding consumer interests. With major players in the industry, including SBI Cards, HDFC Bank, and ICICI Bank, mandated to offer customers a choice, the stage is set for a transformation in India’s card payment landscape.