Financial services giant Mastercard has submitted a document to the US in June wherein it complained that Narendra Modi has been using ‘nationalism’ to promote the homegrown payment network ‘RuPay’. According to media reports, the report also states that New Delhi’s protectionist policies were hurting foreign payment companies. The report was accessed by Reuters.
Narendra Modi had launched the Rupay app, along with two other Indian mobile payment apps, namely, BHIM and SBI app, in an event called ‘Business, Innovation and Community Event’ in Singapore in May this year. Prime Minister Narendra Modi urged people to use RuPay cards to make digital payments, saying that the transaction fees earned through the homegrown card network will help in building roads, schools and hospitals for the poor.
The rise in the use of the RuPay network due to Modi’s backing in the recent years have broken the dominance of US payment giants such as Mastercard and Visa. More than half of India’s 1 billion debit and credit cards are reportedly using the RuPay payment system, making it a difficult task for companies like MasterCard to maintain its foothold in India, which is the world’s biggest growing payments markets.
The note, which was sent by a Mastercard Vice President for Global Public Policy, Sahra English to the United States Trade Representative (USTR) said that, while Modi’s digital payments push was ‘commendable,’ the Indian government had adopted ‘protectionist measures’ to promote their own payment channels.
“Increasing rhetoric from the prime minister and government mandates on promotion and preference for RuPay. It continues to create market access issues for US payments technology companies,” Mastercard said in the note and also urged the US government, “The Indian government’s preferential treatment of RuPay coupled with fallacies on pricing must be discontinued.”
The US companies in India have been increasingly protesting against Modi’s policies which they often allege are protectionist.
Earlier this year, the US technology companies have also protested against an Indian law that would require them to store more data locally, raising their costs.
Reuters has reported that Mastercard has said in a statement it “fully supports” the Indian government’s initiatives and is “deeply invested” in the country. The company did not comment on its USTR note and its executive Sahra English reportedly did not respond to questions.