16% Of Credit Card Spending In India Takes Place On RuPay Network: Dilip Asbe

National Payments Corporation of India (NPCI) MD and CEO Dilip Asbe has reportedly said that almost 16% of all credit card spending in India takes place on the RuPay network, with nearly half of these transactions made via credit on the Unified Payments Interface (UPI).

According to an ET report, speaking at the Mumbai Tech Week, Asbe said that over 30 banks now issue RuPay credit cards.

According to data from the Ministry of Finance, RuPay credit cards on UPI recorded over 750 Mn transactions worth INR 63,825.8 Cr in the ongoing fiscal year until October 2024, up from 362.8 Mn transactions valued at INR 33,439.2 Cr in the previous year.

While RuPay is seeing increased adoption, mainly due to UPI-enabled credit cards, Visa and Mastercard still hold a major share of India’s credit card market, added the report.

In June 2022, the RBI approved the integration of UPI with RuPay credit cards, making RuPay the sole UPI-linked credit card network in India, giving it a substantial advantage.

Then, in October 2023, NPCI implemented interchange fees for credit card UPI transactions, with small merchants being exempted from these charges.

In March last year, the RBI further solidified RuPay’s position by mandating that card issuers provide multiple network options to customers, while also prohibiting exclusive agreements that restrict their choice of card networks.

Meanwhile, NPCI is establishing a research and development center with a capacity for 5,000 people as part of its global expansion strategy. Asbe mentioned that representatives from approximately 70 countries have visited the NPCI office in the past four to five years.

This development comes at a time when the government has reduced its incentives for promoting RuPay debit cards and low-value UPI transactions, specifically those up to INR 2,000, marking a significant shift in digital payments.

The budget document presented by Finance Minister Nirmala Sitharaman highlighted a reduction in the incentive scheme for promoting RuPay debit cards and low-value BHIM-UPI transactions (person-to-merchant), with the allocation dropping from INR 2,000 Cr last year to INR 437 Cr for the upcoming fiscal year.

It’s important to note that the INR 2,000 Cr figure for 2024 was a revised estimate, down from the original budget allocation of INR 1,441 Cr. Over the years, the government has been gradually reducing funding for this scheme, which was initially introduced in 2023 with an outlay of INR 2,484 Cr.

This development coincides with UPI transactions reaching an all-time high in January, recording 16.99 Bn transactions. UPI transactions saw a 1.5% increase in January, rising from 16.73 Bn in the previous month. The total transaction value for January stood at INR 23.48 Lakh Cr, up from INR 23.25 Lakh Cr in December.