Nov 5: It June this year, the US-based MasterCard moved the United States Government stating that Indian Prime Minister Narendra Modi was making use of nationalism to uphold the use of a domestic payments network, and that New Delhi’s protectionist policies were hurting foreign payment companies. This was revealed ii a document reported on the news agency, Reuters. India’s homegrown payment network, RuPay was promoted by Modi which in turn is seen as a potential threat to the US payment companies like Mastercard and Visa.
Around 1 billion and above debit and credit cards in India are now through the RuPay payment system. This makes it difficult for companies like MasterCard to grow in a market like India. Modi while sanctioning RuPay said that the transaction fees spend will stay within the country, which in turn will help build roads, schools, and hospitals.
According to a news report, Sahra English, Vice President for Global Public Policy has sent a note, in which she stated that the Indian government adopted and implemented some protectionist measures which will be a huge disadvantage for global companies. US companies in India have been struggling due to such protectionist measures by the Indian government, the note added.
Reuters also disclosed the fury of Purchase, the world’s second-largest payment company based in New York due to Modi’s support for RuPay. MasterCard states that the comments from the government and the Prime Minister make the promotion and preference for RuPay compulsory. This builds market access issues for the US payment companies.
The company asked the US government to propose to put an end to of the Indian government’s inclination towards RuPay. MasterCard also had made their stand clear, saying that they supported the initiatives taken by the Indian government.
The company denied commenting on the USTR note and the executive Sahra English remained silent on the questions. The question as to whether the Indian government is aware of the concerns of MasterCard still remains. Visa did not comment on the questions by Reuters. MasterCard had planned an investment plan of $ 1 billion in the Indian market for 2014-2019.
With 2,000 people, India accounts for 14 percent of the global MasterCard workforce, the largest outside the United States. The company recruited a Bollywood actor this year for a campaign aimed at encouraging consumers in smaller cities to use debit cards more regularly as it seeks to grow in India.
The MasterCard workforce in India, as per the reports, is the largest one outside its home and employees around 2,000 people. In order to grow in India, the company hired a Bollywood actor for the 2018 campaign to encourage consumers in small cities to increase the use of debit cards.