Mastercard Lodged U.S. Protest Over Modi’s Promotion of Indian card Network RuPay

NEW DELHI (Reuters) – Mastercard told the United States government in June that Prime Minister Narendra Modi was using nationalism to promote the use of domestic payments network RuPay, and New Delhi’s protectionist policies were hurting foreign payment companies, a document seen by Reuters showed.

Modi has in recent years backed India’s homegrown payments network RuPay, whose rise has broken the dominance of U.S. payment giants such as Mastercard and Visa. More than half of India’s 1 billion debit and credit cards now go through the RuPay payment system, and that means companies such as Mastercard face an uphill task to expand rapidly in one of the world’s biggest payments growth markets.

Modi has publicly endorsed the indigenous card payment network, saying using RuPay was like serving the country as its transaction fee stays within India and could help build roads, schools and hospitals

In a written reference to Modi’s stance, Mastercard told the Office of the United States Trade Representative (USTR) on June 21 that the prime minister “associated the use of RuPay cards with nationalism, claiming it serves as ‘kind of national service’.”

The note, which was sent by a Mastercard Vice President for Global Public Policy, Sahra English, said that, while Modi’s digital payments push was “commendable”, the Indian government had adopted “a series of protectionist measures” to the detriment of global companies.

U.S. companies in India have been increasingly battling Modi’s policies they perceive to be protectionist. This year, U.S. technology companies have protested against an Indian law that would require them to store more data locally, raising their costs.

The previously unreported note, which was seen by Reuters, shows the extent to which Modi’s support for RuPay frustrated the Purchase, New York-based company, which is the world’s second-largest payments processor.

“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,” Mastercard said in the note.

Source: Reuters

Image Courtesy: FE