Visa, Mastercard welcome RBI’s intent on democratising retail payments

Global payment technology giants Visa and Mastercard have said that the Reserve Bank of India’s intent to open up the retail payments segment will promote new players and prevent umbrella body National Payments Corporation of India (NPCI) from getting undue advantage.

RBI had in January had invited responses after floating a policy paper aimed at encouraging the development of a pan-India payments system, It had also questioned the dominance of NPCI as the de-facto gatekeeper of retail payments in India.  

The Economic Times reported that Visa, in its submission to the RBI, cautioned against monopolisation but also warned against inviting a 'multitude' of players.

“This [RBI proposal] will also ensure no single payment system has an undue advantage over others – any imbalance created by regulatory arbitrage could lead to increasing systemic risk,” Visa was quoted as stating.

The payments technology company further added that “the criteria for licensing should be based on principles that allow entry in the retail payment systems in an open and competitive manner to the entities having proven robust capabilities.”

Mastercard said that the move will open up innovation in retail payments.

Both Visa and MasterCard had previously complained to the US government in June 2018 that India was using protectionist measures to promote its domestic card scheme RuPay, which is managed by NPCI.

NPCI is a not-for-profit whose majority shareholders are public-sector banks. Apart from RuPay, it manages mobile payment system Unified Payments Interface (UPI), mobile payment app BHIM, Immediate Payment Service (IMPS), and National Automated Clearing House (NACH).