https://sputniknews.in/20260921/success-of-indias-upi--rupay-card-unnerving-us-expert-12365871.html
Success of India's UPI & RuPay Card Unnerving US: Expert
Success of India's UPI & RuPay Card Unnerving US: Expert
Sputnik India
India’s decision to back homegrown RuPay card on UPI over rivals Visa and Mastercard is a necessity to guard its “economic sovereignty” rather than protectionism, S Balakrishnan, Co-founder of Avellon Intelligence, said.
2026-09-21T20:25+0530
2026-09-21T20:25+0530
2026-09-21T20:25+0530
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India’s decision to back homegrown RuPay card on UPI over rivals Visa and Mastercard is a necessity to guard its “economic sovereignty” rather than protectionism, S Balakrishnan, Co-founder of Avellon Intelligence, said.Balakrishnan describes India’s fintech policies as “common sense in a multipolar world”.Balakrishnan explained that dependence on foreign networks while the Indian government was trying to bring millions of its citizens into a formal finance framework could result in “permanent vulnerability, higher costs for merchants, data flowing overseas and exposure to external policy pressure”.While American card systems such as Visa, Mastercard and American Express still command around 62% of the Indian card market (according to a report by Bernstein Securities last year), RuPay now controls 38% in the segment, an exponential rise attributed to the launch of UPI in 2016.On the other hand, around 49% of the global real-time online transactions were conducted on UPI, making it a global leader in the space, according to ACI Worldwide report on ‘Prime Time for Real-Time’ 2024. No American platform was on the list of top five digital payments networks.The American cards’ declining market share in the world’s biggest market and the fastest-growing major economy has unsettled successive US administrations.The comments come against the backdrop of the US Trade Representative’s (USTR) 2026 National Trade Estimate Report which said that UPI had been favouring domestic suppliers over foreign suppliers, creating a “non-level playing field”. USTR also flagged the '30% ceiling limit' for third-party apps on UPI, a rule which seeks to prevent a foreign monopoly or duopoly in the Indian market. National Payments Corporation of India (NCPI), which runs UPI, has also proposed a Merchant Discount Rate (MDR) on certain “high-value” UPI transactions from 15 October, stoking a political debate whether the platform should be kept free or not.At the same time, Balakrishnan firmly defended the 30% ceiling rule for debit transactions on UPI, announced in 2020 but set to be enforced by December 2026. The Indian Finance Ministry said last week that the ceiling could not be implemented because “companies other than the market leaders could not compete in the absence of a self-sustaining revenue model”. In debit transactions, Google Pay and PhonePe, both headquartered in the US, control 80% of the transactions on UPI, creating an effective duopoly.He asserted that the 30% rule would keep the platform under India’s “strategic control”.The Indian Finance Ministry has said that the proposed MDR of 0.4% on certain person-to-merchant (P2M) and other high-value transactions from 15 October will provide a “self-sustaining revenue model” to smaller companies to compete for higher share in the UPI ecosystem.“Thus, introduction of MDR has been done with the intention of allowing more domestic companies to expand their operations,” the Indian government has said, while dismissing rumours that the MDR was being introduced under "external" pressure.Further, he called out the USTR’s stance on UPI and RuPay as “classic pressure politics dressed up as free trade principles”.He noted that the same USTR report has raised similar concerns on Brazil’s digital payments platform Pix.“Russia’s experience after 2014 and 2022 proved that control over these rails is a matter of national security, not a concession to be bargained away,” the Indian expert concluded.
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Success of India's UPI & RuPay Card Unnerving US: Expert
The success of India’s homegrown RuPay card and Unified Payments Interface (UPI), the world’s largest real-time digital payments platform, has unnerved the US as it erodes the clout of Visa and Mastercard, an Indian expert told Sputnik, adding that these matters should be excluded from India-US trade talks.
India’s decision to back homegrown RuPay card on UPI over rivals Visa and Mastercard is a necessity to guard its “economic sovereignty” rather than protectionism, S Balakrishnan, Co-founder of Avellon Intelligence, said.
Balakrishnan describes
India’s fintech policies as “common sense in a multipolar world”.
“RuPay is not just another card network. It is India’s sovereign payment rail, built and controlled at home. When ordinary Indians pay with RuPay linked to UPI, the fees stay low, the data stays in India and the system cannot be switched off by a foreign boardroom or a sanctions list,” Balakrishnan explained.
Balakrishnan explained that dependence on foreign networks while the Indian government was trying to bring millions of its citizens into a formal finance framework could result in “permanent vulnerability, higher costs for merchants, data flowing overseas and exposure to external policy pressure”.
“Russia applied the same logic when it built Mir and SPFS after global payment systems were weaponised by the US. India has every right to protect and expand its own infrastructure. That is not protectionism, it is common sense in a multipolar world,” he said.
While American card systems such as Visa, Mastercard and American Express still command around 62% of the Indian card market (according to a report by Bernstein Securities last year), RuPay now controls 38% in the segment, an exponential rise attributed to the launch of UPI in 2016.
On the other hand, around 49% of the global real-time online transactions were conducted on UPI, making it a global leader in the space, according to ACI Worldwide report on ‘Prime Time for Real-Time’ 2024. No American platform was on the list of top five digital payments networks.
The American cards’
declining market share in the world’s biggest market and the fastest-growing major economy has unsettled successive US administrations.
The comments come against the backdrop of the US Trade Representative’s (USTR) 2026 National Trade Estimate Report which said that UPI had been favouring domestic suppliers over foreign suppliers, creating a “non-level playing field”. USTR also flagged the '30% ceiling limit' for third-party apps on UPI, a rule which seeks to prevent a foreign monopoly or duopoly in the Indian market. National Payments Corporation of India (NCPI), which runs UPI, has also proposed a Merchant Discount Rate (MDR) on certain “high-value” UPI transactions from 15 October, stoking a political debate whether the platform should be kept free or not.
At the same time, Balakrishnan firmly defended the 30% ceiling rule for debit transactions on UPI, announced in 2020 but set to be enforced by December 2026.
The Indian Finance Ministry said last week that the ceiling could not be implemented because “companies other than the market leaders could not compete in the absence of a self-sustaining revenue model”. In debit transactions, Google Pay and PhonePe, both headquartered in the US, control 80% of the transactions on UPI, creating an effective duopoly.
“A hard 30% ceiling on any one third party app is a straightforward safeguard against duopoly risk. Critical national infrastructure should not rest in the hands of two foreign linked platforms, however efficient they are today. This US based Duopoly Concentration creates systemic vulnerability, pricing power and reduced room for Indian innovators,” the financial expert said.
He asserted that the 30% rule would keep the platform under India’s “strategic control”.
The Indian Finance Ministry has said that the proposed MDR of 0.4% on certain person-to-merchant (P2M) and other high-value transactions from 15 October will provide a “self-sustaining revenue model” to smaller companies to compete for higher share in the UPI ecosystem.
“Thus, introduction of MDR has been done with the intention of allowing more domestic companies to expand their operations,” the Indian government has said, while dismissing rumours that the MDR was being introduced under "external" pressure.
Balakrishnan also said that India’s sovereign payments’ systems should be kept out of ongoing India-US bilateral trade agreement (BTA) talks, even though the USTR report stated that Washington has raised its concerns with New Delhi.
Further, he called out the USTR’s stance on UPI and RuPay as “classic pressure politics dressed up as free trade principles”.
“The United States has long treated its
own financial infrastructure SWIFT, dollar-clearing, Visa/Mastercard dominance as strategic assets. Yet when India or Russia or any BRICS partner builds resilient alternatives, Washington suddenly discovers barriers,” Balakrishnan remarked, in effect calling out US double standards on the issue.
He noted that the same USTR report has raised similar concerns on Brazil’s digital payments platform Pix.
“Russia’s experience after 2014 and 2022 proved that control over these rails is a matter of national security, not a concession to be bargained away,” the Indian expert concluded.
