India has been moving away from international payment networks for years. It is a hard blow for the giants Visa and Mastercard

Visa and Mastercard are losing ground at a disturbing rate in India. The largest country in the world by number of inhabitants has been promoting a local payment system which has become a direct threat to the aforementioned American companies. It is about the Unified Payments Interface (UPI, for its acronym in English), which processes around 71% of all transactions, according to data from the consulting firm Bernstein.

UPI allows merchants to bypass payment networks that allow international credit and debit cards to operate. Instead, it offers the possibility that they can accept payments through QR codes and phone numbers. Users just need to download the UPI app, create an account and connect their bank account to start trading. The bank, however, must have an agreement with the platform.

India also has local credit cards

India has also developed a credit card network known as RuPay. The strategy to encourage merchants to use it has been very simple: it works with UPI and its commissions are very low. As reported by TechCrunchAdded to this is a measure by the Central Bank of India that prohibited exclusive agreements with international payment networks. And everything seems to indicate that these systems will continue to grow over time.

As we can see, India has improved its digital payment system. This is presented as an advantage for its residents and companies. But it has its consequences. The idea of ​​progressively losing a market of millions of inhabitants is not good news for firms like Visa and Mastercard. In addition, tourists may find themselves with fewer payment options when they land in the country of the Taj Mahal and temples.

Many visitors agree that Using international credit cards in India is becoming more difficult, although experts explain that Hotels and restaurants in big cities generally still accept them. Those responsible for UPI know this perfectly, and they are working to expand their service to foreigners who are visiting the country. In any case, cash still reigns anywhere you go.

Images | Ali Mkumbwa

In Xataka | India has its own ‘Silicon Valley’ in Bangladesh. The problem is that it is a ghost town