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Move over, Mastercard. Upstarts gain in India payments space


Global card companies like Visa and Mastercard are losing market share to upstarts in the world’s most innovative payments market: India. Transactions through India’s homegrown Unified Payments Interface (UPI) – which allows mobile apps run by retailers, airlines and other firms to take payment directly from bank accounts – reached almost half the value of debit and credit cards swiped at stores last month, central bank data show. The surge in UPI transactions has taken place since 2016 when the interface was set up by an umbrella organization of Indian banks. Mastercard, in contrast, has built up its business in India over three decades. “The introduction of UPI in August 2016 led to the creation of a wealth of new innovative payment solutions, and the adoption rates of UPI payments are truly spectacular,” US-based Fidelity National Information Services said in a December 2017 report. UPI “opens up access to real-time by allowing payments to be directly integrated into external business applications”, it said. India’s payments system was alone among more than 40 countries tracked by Fidelity National to gain a top score of five for innovation and customer value. China’s Internet Banking Payment System scored two and Kenya’s PesaLink scored four. Criteria included round-the-clock availability, speed of settlement, and level of government or regulator support. and Jet Airways India – the nation’s second-biggest airline by passengers – are among firms that have integrated UPI into their apps in order to take payment from customers. Facebook is piloting a payments service in India with a UPI backbone for its WhatsApp Pay, which has already drawn comparisons with the way WeChat reshaped payments in China. [Bloomberg]