After FM pitch for promoting RuPay, Visa says competition offers innovation, choice to customers
Mumbai: Global payments major Visa on Wednesday responded to the Indian government’s push for adoption of RuPay cards, saying presence of all kinds of players fosters innovation and offers customers a choice.
A day after Finance Minister Nirmala Sitharaman asked banks to “only promote” RuPay cards, Visa’s country manager for India and South Asia T R Ramachandran said that digital payments penetration is very low in India at only 18 per cent of overall personal consumption expenditure.
“We all have our roles to play,” Ramachandran, whose company along with peer Mastercard competes with the Rupay alternative offered by National Payments Corporation of India (NPCI), said.
Talking to reporters, he said that India is a large country and unlike the western countries, where it is a zero-sum game, where somebody has to lose for somebody to win.
“Given the statistics… that under 18 per cent of private consumption expenditure is digitised, I would argue it takes all kinds of players, domestic, international etc because that fosters innovation, that fosters customer choice,” he said.
Addressing the annual general meeting of the Indian Banks Association on Tuesday, Sitharaman had asked lenders to “only promote” Rupay cards to their customers.
“RuPay card will have to be the only card you promote. Whoever needs a card, RuPay will be the only card you would promote,” she had said in the remarks which come at a time when self-reliance has become a key policy goal for India.
It can be noted that global rivals have been jittery since the launch of Rupay alternative in 2012. India feels the global payments enablers take out money and data out of the country which can be saved within. NPCI is a body that was initially promoted by the RBI and now owned by multiple financial institutions.
On Wednesday, Ramachandran was speaking at an event where Visa and HDFC Bank announced a newly enhanced version of their app for merchants called ‘Smarthub Merchant Solutions 3.0’.
HDFC Bank’s head for payments, consumer finance, marketing and digital banking Parag Rao said the largest private sector lender is targeting a 10x growth in the number of merchants it serves and take the number up to two crore in the next three years.
At present, the bank is adding over 75,000 merchants a month across all forms of services and added that these are long term relationships which the bank develops through a current account to start with.
It also offers value added services along with the app, like giving a merchant an ability to send product details to customers over instant messaging service Whatsapp along with a code to enable a closer look at the product and immediate payment, for the product to be delivered, Rao said.
To a question about the New Umbrella Entity (NUE) on payments, Rao said the NUE is a “strategic” initiative which the bank and other industry players are looking at but declined to comment further.