How a homegrown card payment network went on to grab volumes from Visa, Mastercard and Amex

The three global networks have so far not been allowed to use UPI as an underlying payments platform.

RuPay credit card transactions on UPI currently account for 38% of all credit card transactions in India by volume and about 8% by value, shows data from a Bernstein Securities report on 27 October. The brokerage did not mention a time period for this data.

The individual shares of Visa, MasterCard and Amex in the remaining 62% of the number of credit card transactions was immediately not available from Bernstein. Including transactions going through traditional payment networks, the value of RuPay credit card transaction rises to 18%, as per industry estimates.

“There is a definitive use case for RuPay credit cards because the acceptance universe of UPI is far bigger than the credit point-of-sale (PoS) machines,” said Bikram Singh Yadav, business head of credit cards at RBL Bank, adding that no bank can avoid paying attention to the RuPay network.

Data for fiscal year 2024 (FY24) from Bernstein put RuPay credit card volumes and value at 10% and 1.8% respectively as a share of total credit card transactions. The numbers for fiscal 2025 are available only up to October 2024: 28% and 5.3% by volume and value.

In absolute terms, RuPay credit card holders made 362.9 million UPI payments worth ₹33,439.2 crore in the fiscal year ending 31 March 2024, per ministry of finance data. This grew sharply in the months after: it shot up to 750 million transactions in the April to October months valued at ₹63,825.8 crore.

The UPI effect

Digital payment trackers and bankers see the underlying UPI platform as the primary driver for sharp growth of RuPay credit cards. Given that UPI is already ubiquitous and that there are more acceptance points for UPI than those that accept credit cards, it gives RuPay cards a clear advantage over other card networks. India had over 112 million credit cards at end-August, per data from the Reserve Bank of India (RBI), growing 6.5% from the same period last year.

Yadav of RBL Bank said that with the UPI feature activated, customers spend about 20% more than regular credit cards. RBL Bank, he said, is trying to issue multiple cards to customers including RuPay credit card and virtual cards. The bank, where Dubai-based Emirates NBD Bank recently decided to buy a 60% stake, had 4.5 million credit cards with an average spend of ₹15,628 at end-August. Like its peers, RBL Bank does not disclose how many of these cards are on Rupay and other networks.

The mood at National Payments Corp. of India (NPCI), India’s umbrella body for retail payments, meanwhile, is one of more ground to be covered. An industry executive said that despite a hard push from NPCI, backed with brand campaigns and sponsorships, the relatively low value numbers of RuPay credit card transactions, even with healthy volume numbers, show that a lot needs to be done. The executive said that it is not easy to penetrate the stronghold of global card networks with whom banks have long-standing relationships. “If you see the value of transactions, RuPay is still way behind competitors despite efforts,” said this executive.

The Economic Times reported in July that NPCI has started offering financial incentives to banks to push RuPay credit cards to their customers in a bid to promote homegrown payment methods, citing people directly aware of the matter.

RuPay to track UPI?

UPI transactions continue to be strong: they were at 19.6 billion in September worth ₹24.9 trillion, as against 15 billion transactions of ₹20.6 trillion in the same period last year.

Analysts continue to be upbeat about the prospects of RuPay on UPI.

“A combination of wider merchant acceptance—over 50 million UPI merchants [as against less than 10 million with PoS devices] and a lower MDR structure for smaller merchants has accelerated adoption,” analysts Pranav Gundlapalle, Ishan Mittal and Anirudh Gupta at Bernstein said in the note from which data has been quoted earlier.

RuPay credit card UPI transactions of up to ₹2,000 do not attract any merchant discount rate (MDR) charges. Those above the threshold have an MDR of up to 2% depending on the size of the business accepting payments, with smaller merchants paying less than their larger counterparts.

MDR is the charge paid by the merchant to the bank, card network and the point-of-sale provider for offline transactions and to the payment gateways for online purchases. Businesses are also not supposed to pass it on to customers.

“If UPI linkage remains exclusive to RuPay, it is poised to emerge as the dominant network in credit cards,” Bernstein said in the note.

In June 2022, RBI allowed RuPay credit cards to be used on UPI, allowing users to make a wide range of payments, a facility until then limited to point of sale terminals. While announcing the decision back in 2022, the then RBI governor Shaktikanta Das had said that “to begin with”, RuPay cards will be linked to UPI.

Emails sent to MasterCard, Visa, NPCI and RBI on 27 October remained unanswered till press time, as did an emailed request for comment sent to Amex on 28 October morning.

A top fintech executive said the RuPay-UPI space offers immense value, especially for a certain segment of customers.

“At Kiwi, we’ve seen this play out in our own data—RuPay credit cards tend to gain higher adoption among entry-level and middle-income users who value simplicity, trust, and the ability to make UPI-based credit payments seamlessly,” said Mohit Bedi, co-founder of Kiwi, an issuer of credit cards along with banks.

While this led to an increase in RuPay’s share of new issuances at Kiwi–now 45-48%–overall spends haven’t scaled at the same pace, settling at roughly 15-16% of total credit card spends, said Bedi. “A large portion of these new RuPay cards were add-ons to existing users rather than first-time credit customers, which explains the gap between issuance and spend levels.”