RuPay launched a game-changing incentive scheme offering banks revenue‑sharing rewards (cashbacks / issuance-linked perks):
NPCI Turns the Heat Up on Visa & Mastercard — Time for Acquirers to Capitalize:
📌 Why this matters to Merchant Acquirers?
NPCI has launched a game-changing incentive scheme for RuPay credit cards — offering banks revenue‑sharing rewards (cashbacks / issuance-linked perks) carved out from RuPay’s processing fees, rather than just discounted settlement rates . This strategic shift is designed to accelerate RuPay's penetration and chip away at the Visa–Mastercard duopoly in India’s fast-growing credit card market .
At present, India has ~111 million credit cards in circulation (up from 55 mn in Dec 2019), with RuPay shares climbing strongly — from ~3% in 2023 to ~12% in 2024 . Meanwhile, roughly 16% of total credit card spends now happen on RuPay, with ~50% via UPI-linked RuPay cards .
🔍 Business Impact for Merchant Acquirers:
Faster adoption of RuPay credit cards means growing volumes via UPI-linked credit transactions — higher UPI usage uplifts volumes and merchant billings.
Higher interchange fee pools: Since NPCI is offering banks ~10–12 bps back as incentives, issuers are more motivated to push volume — benefiting acquirers through increased settlement flows .
Broadened merchant applications: NPCI is easing UPI limits on RuPay credit cards to enable high-ticket spends like travel, hotels, and online commerce — opening new merchant categories and larger baskets .
✨ Strategic Opportunities for Acquiring Banks:
Promote UPI-linked RuPay via marketing tie-ups with issuing banks to onboard tier-2/3 merchants; many backward geographies are ripe for uptake.
Optimize MDR and pricing: Where RuPay on UPI incurs higher MDR, structure merchant incentive schemes to compensate while preserving margins.
Enhance acceptance infrastructure: Enable smart QR-based flows and POS onboarding for seamless credit-on-UPI experiences .
Track and reward usage: Develop dashboards to monitor UPI RuPay credit spends across merchants and offer performance-based rewards.
✅ What to say to issuing bank partners:
“With NPCI’s incentive model now in place, your ROI on RuPay credit card issuance increases — and help merchants convert that spend online. Let’s co-create offers that drive volume, acceptance growth, and digital spends across categories.”
⚡ Bottom line: NPCI is aggressively promoting RuPay credit to capture more share in the Indian credit space. As a merchant‑acquiring bank, it’s your moment to align, respond, and drive acceptance strategies around UPI‑linked RuPay credit, turning incremental issuance into transaction volume on your rails.
NPCI Turns the Heat Up on Visa & Mastercard — Time for Acquirers to Capitalize:
📌 Why this matters to Merchant Acquirers?
NPCI has launched a game-changing incentive scheme for RuPay credit cards — offering banks revenue‑sharing rewards (cashbacks / issuance-linked perks) carved out from RuPay’s processing fees, rather than just discounted settlement rates . This strategic shift is designed to accelerate RuPay's penetration and chip away at the Visa–Mastercard duopoly in India’s fast-growing credit card market .
At present, India has ~111 million credit cards in circulation (up from 55 mn in Dec 2019), with RuPay shares climbing strongly — from ~3% in 2023 to ~12% in 2024 . Meanwhile, roughly 16% of total credit card spends now happen on RuPay, with ~50% via UPI-linked RuPay cards .
🔍 Business Impact for Merchant Acquirers:
Faster adoption of RuPay credit cards means growing volumes via UPI-linked credit transactions — higher UPI usage uplifts volumes and merchant billings.
Higher interchange fee pools: Since NPCI is offering banks ~10–12 bps back as incentives, issuers are more motivated to push volume — benefiting acquirers through increased settlement flows .
Broadened merchant applications: NPCI is easing UPI limits on RuPay credit cards to enable high-ticket spends like travel, hotels, and online commerce — opening new merchant categories and larger baskets .
✨ Strategic Opportunities for Acquiring Banks:
Promote UPI-linked RuPay via marketing tie-ups with issuing banks to onboard tier-2/3 merchants; many backward geographies are ripe for uptake.
Optimize MDR and pricing: Where RuPay on UPI incurs higher MDR, structure merchant incentive schemes to compensate while preserving margins.
Enhance acceptance infrastructure: Enable smart QR-based flows and POS onboarding for seamless credit-on-UPI experiences .
Track and reward usage: Develop dashboards to monitor UPI RuPay credit spends across merchants and offer performance-based rewards.
✅ What to say to issuing bank partners:
“With NPCI’s incentive model now in place, your ROI on RuPay credit card issuance increases — and help merchants convert that spend online. Let’s co-create offers that drive volume, acceptance growth, and digital spends across categories.”
⚡ Bottom line: NPCI is aggressively promoting RuPay credit to capture more share in the Indian credit space. As a merchant‑acquiring bank, it’s your moment to align, respond, and drive acceptance strategies around UPI‑linked RuPay credit, turning incremental issuance into transaction volume on your rails.
