Context: Visa and Mastercard opposition on Indian Government’s intervention in payment gateways via RuPay Card.
Issues raised by Visa Inc and Master card:
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Mastercard Inc, in 2018 had charged India’s PM of using nationalism to promote RuPay. For instance, in 2018, Indian PM had declared the use of RuPay patriotic.
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Visa recently complained that, the phenomenal increase in the use of RuPay card is a result of India’s informal and formal policies supporting it. For instance, the government had abolished the merchant discount rate (MDR) on transactions using the RuPay debit card and the UPI from January 1, 2020.
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Along with PM, Union Finance Minister has also supported the use of RuPay when in 2020, she said that RuPay is the only card banks should promote.
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Govt also abolished MDR (Merchant Discount Rate) for RuPay transactions from 1st Jan 2020, while for Mastercard or Visa debit card, merchants are charged an MDR of 0.4-0.9%.
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Further, all Indian companies with an annual turnover exceeding Rs 50 crore have to compulsorily offer RuPay payment options to their customers.
Indian Government’s Fintech Initiatives:
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Esanjeevani: The government launched a telemedicine platform, esanjeevani.in. It allows anyone to register, consult a doctor, and download a prescription.
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Village-level retail chain: Government launched a desi, rural version of Big Basket by creating a village-level online retail chain. This ambitious plan is being led by the Common Service Centres.
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BHIM: Apart from the UPI and RuPay, the government had launched the payment facility Bharat Interface for Money (BHIM).
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Bharat Bill Pay System: National Payments Corporation of India (NPCI) launched the Bharat Bill Pay System, a single platform for all utility biller.
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BharatNet: BharatNet is launched to provide a minimum of 100 Mbit/s broadband connectivity to all 250,000-gram panchayats in the country, covering nearly 625,000 villages.