Why is the Indian Government promoting RuPay over Visa and Mastercard?

Along with RBI, the government has mandated the use of RuPay cards for various transactions, such as government employee salary disbursements, direct benefits distribution, etc. Additionally, it has mandated all Public Sector Banks (PSU) to promote RuPay cards over other cards to their customers. Because of this, the market share of RuPay in the debit card segment rose to 60% in 2021 from just 15% in 2017. Further, initially, the RuPay cards came under zero MDR norms. The government offers incentives to banks for the foregone MDR revenue to further encourage their adoption. But we did not see the same growth in the credit card segment. Why? RuPay only has around 20% share of India’s credit card market, which is led by Visa, followed by MasterCard. This is because banks were promoting Visa and Mastercard credit cards over RuPay. Basically, banks earn more money from Visa and Mastercard credit cards because they share a good commission from the high MDR they charge. To tackle this situation, the RBI and NPCI have announced that you can add your RuPay credit cards to UPI. This will increase the demand for RuPay credit cards. Also, there is a discussion going around to allow customers to switch between card networks. If all goes well, from Oct 1st, 2023, you will be able to change your credit card’s network from Visa or Mastercard to RuPay. This may lead to an increase in RuPay credit cards in the Indian credit card segment. But what are the benefits and disadvantages of using the RuPay card for you? Check out our blog. Link - wp.me/pe5xoh-12Z Share it with your friends if you find it useful. #shorts #personalfinance #financeshorts #financeindia #rbi #creditcard #debitcard #indiangovernment #visa #mastercard #rupay #rupaycard #transactions #governmentprojects #mdr #indianbanks