Visa slashes fee on debit card payments, wants more small merchants on board
BENGALURU: Visa, the largest card payments network in the country, has slashed the charges it levies on debit card transactions, a move that could substantially enlarge India’s digital payments market by bringing more small merchants and customers into the fold.
In a note circulated among member banks recently, Visa said it would cut rates on debit card transactions by up to 95%. ET has reviewed a copy of the note. The largest quantum of decrease will apply to transactions under Rs 2,000.
“Visa has revised its data processing fees to encourage everyday digital payment usage across consumer and merchant categories,” a spokesman for Visa said. “This will not only help drive the adoption of debit card payments among consumers but also assist client initiatives towards expanding digital payment infrastructure in support of the Digital India programme.”
Competition from RuPay
Visa commands more than 40% market share in India in terms of the number of card transactions on its network, as per industry estimates.
Debit cards account for 96% of the cards in use in India but it’s credit cards that account for 51% of card payments in terms of value, ET reported on June 12. But with only 37 million credit cards in use in the country — as against 861 million debit cards — their usage does not translate to mass adoption of digital payments. Effective July 1, Visa’s charges applicable to card issuing banks will drop to 15 paise for transactions under Rs 2,000 and to Rs 1.5 for higher-value payments, from a uniform rate of Rs 2.99 per transaction.
Pratik Bhakta
The Economic Times
Jun 13, 2018, 08.09 AM IST
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