“It is a great opportunity for Visa, which has been engaging heavily with start-ups in the last 18-24 months to move these sourcing pipes in their favor,” said Amit Das, Co-founder of Think360 – a payments analytics firm. “We have also heard of fintechs like YAP taking this opportunity to show how differentiated their agility is. They have managed to switch over completely to Visa pipes in less than 48 hours.”
Industry sources say that Visa and MasterCard together process a significant chunk – over 70 per cent – of India’s credit cards. For debit card issuances, NPCI’s RuPay is said to be the largest card issuer. The central bank doesn’t disclose the breakup.
These sources indicate that while Visa has a 44 per cent market share, MasterCard owns 37 per cent of the market.
“While both Visa and Rupay will benefit in the segments they are trying to address, Visa will benefit more because of its ability to roll out products faster than Rupay,” brokerage house Macquarie said in a recent report. “Visa has a concept of providing exceptional approval and is able to go live within 24 hours at times. Since the process of transition is shorter and faster with Visa, it could benefit more from this disruption.”
Visa is also gaining an upper hand in getting new debit card issuance contracts as well. The central government’s zero Merchant Discount Rate rule on RuPay debit cards means that private sector banks, which were tying up with Mastercard to issue these cards, are almost exclusively moving to Visa.
Last month, the Reserve Bank of India (RBI) imposed regulatory restrictions on MasterCard from onboarding new domestic debit, credit, or prepaid customers on its card network in India from July 22 onward. The central bank’s supervisory action cited “non-compliance with directions on Payment System Data.”
To be sure, these restrictions are only on Mastercard’s new cards and not the existing instruments held by customers.