The world’s biggest payments firm, United States-based Visa Inc, has said nationalism or governmental involvement in the digital payment business is not a negative and has instead helped grow the pie. This is in sharp contrast to its earlier stance when it complained to the US government that India’s promotion of domestic payments rival RuPay had impacted its growth.

“Sometimes, when governments get involved, what they do is, they grow the pie because they build the infrastructure, encourage people to use digital forms of payment, encourage merchants to accept digital forms payment, and the market grows. We have seen that in India. Our business has been thriving. Despite the growth of UPI, the whole market has grown,” Vasant Prabhu, vice-chairman, Visa, said at the UBS Global TMT Virtual Conference. “So we view nationalism or governmental involvement as not necessarily a negative. In fact, it could potentially be a great positive.”

Prabhu said nationalism is not new and that Visa has seen many countries in Europe creating their own domestic schemes in the 1960s and 1970s when Visa was expanding in the continent. “There was a lot of nationalism; European countries in many cases created their own domestic processing networks. And yet, we have a very large business in Europe. Our business in Europe is as large or larger than our business in all of Asia,” he said.

Mastercard and Visa were the two main card issuing companies in India until RuPay was launched by the RBI-backed National Payments Corp of India (NPCI) in March 2012. Bankers estimate that up to 35% of the debit cards have been cornered by RuPay, with Mastercard and Visa splitting the rest between them.

RuPay is estimated to have over 50% market share in incremental debit cards issued since most public sector banks are on that platform. But in credit cards, Mastercard and Visa have the lion’s share.

The Visa vice-chairman’s latest comments mark a complete reversal from the company’s latest annual report where it said certain governments, including China and India, have taken actions that could be detrimental to Visa’s prospects. These include promoting domestic payments systems and networks by imposing regulations that favour domestic providers, imposing local ownership requirements on processors, requiring data localisation and mandating that domestic processing be done in that country.

Since January 2020, the government has removed the merchant discount rate (MDR) charges on RuPay and UPI transactions.