The Indian payments ecosystem has undergone a dramatic transformation over the past few years, largely driven by the adoption of UPI (Unified Payments Interface). Among the most significant beneficiaries of this digital payment revolution is RuPay, India’s domestic card network. With UPI-linked credit card transactions surging, RuPay has seen a remarkable rise in both transaction volume and market share, positioning itself as the card of choice for millions of Indians.
RuPay’s Rising Dominance
Growth in UPI-Linked Credit Card Transactions
- UPI-linked credit card transactions now account for nearly 40% of the total by volume, according to Bernstein data.
- This is a fourfold increase from the 10% share recorded at the end of FY24.
- In terms of transaction value, UPI-linked credit card usage has grown from 2% to 8%, showing similar exponential growth.
Market Share Expansion
- RuPay’s credit card market share has climbed to 16%, up from just 3% two years ago.
- This growth coincides with RBI’s 2022 approval allowing RuPay credit cards to be linked exclusively to the UPI platform, boosting convenience and adoption.
Key Factors Behind RuPay’s Success
Exclusive UPI Integration
- The ability to link RuPay cards exclusively to UPI has enhanced seamless transactions for cardholders.
- Encourages digital-first payments, especially for younger and tech-savvy users.
Rising UPI Adoption
- UPI has become the backbone of India’s digital payments infrastructure, with billions of transactions monthly.
- Increased consumer comfort with UPI-driven payments directly benefits RuPay.
Domestic Preference
- As a local card network, RuPay aligns with the national push for indigenous financial solutions.
- Government policies promoting domestic digital payments indirectly support RuPay’s growth.
Cost Advantage
- RuPay cards often come with lower transaction fees compared to international networks, incentivizing usage.
Future Outlook
- If UPI linkage remains exclusive to RuPay, analysts predict further gains in market share.
- With digital payment adoption expected to continue rising across India, RuPay is positioned to consolidate its leadership in the domestic credit card market.
- Increased awareness campaigns and expansion into tier-2 and tier-3 cities could accelerate adoption even further.
Quick About UPI & RuPay
Unified Payments Interface (UPI)
- Launched: 2016 by NPCI with RBI & IBA
- Function: Real-time inter-bank payments via mobile phones
- Registration: Requires a UPI ID (virtual payment address)
- Transaction Limit: Up to ₹1 lakh per transaction
RuPay
- Launched: 2012 by NPCI
- Type: Domestic card payment network
- Scope: Supports global transactions, designed to compete with international card networks