Visa, Mastercard firms stare at losses as govt pushes for e-payments

Budget 2019: Visa, Mastercard, other credit card firms stare at losses as govt pushes for e-payments:

Retail credit card companies, which make decent profit on business from large retailers, will now be affected as retailers will be inclined to provide other e-payment options to customers.

Large retailers (with a turnover of over Rs 50 crore) are the mainstay of retail credit card transactions. These retailers have been paying fees by way of merchant discount rate (MDR) of close to 2% but now they can also save money by carrying out transactions via e-payment modes like United Payments Interface (UPI), Aadhaar Pay, certain debit cards, UPI-QR Code, and NEFT and RTGS — to customers.

Merchants will now find it more profitable to accept UPI and other local e-payments.

“The move will lead to an increase in the UPI-based to onboard them by the likes of PhonePe, Paytm and Google Pay. RBI wants these companies to deploy BharatQR, which can be accessed by any bank customer.