Key Takeaways

1. India's domestic card network RuPay is rapidly gaining momentum, with its share in new credit card issuances approaching nearly 40%.

2. RuPay's credit card market share has climbed to approximately 16% from just 3% two years ago, following the RBI's decision in late 2022 to allow RuPay credit cards to be exclusively linked to the UPI platform.

India's Homegrown Card Network Is Quietly Outpacing Global Giants One QR Code at a Time

A few years ago, RuPay was considered a government-backed underdog, often overshadowed by Visa and Mastercard in India's credit card market. 

Now, that story is changing. The key to RuPay’s rise is the same QR code used by chai sellers, kirana shop owners, and auto drivers across India: UPI. 

The growth is being driven primarily by the increasing adoption of UPI-linked credit cards, which allow users to make credit payments through UPI-enabled merchant networks. 

Industry data shows that the UPI integration has significantly boosted transaction volumes for RuPay cards, especially in small-ticket and everyday spending categories. 

However, challenges remain. RuPay's heavy reliance on UPI makes it vulnerable if UPI regulations change or if international players gain UPI access for credit cards in the future. 

Cybersecurity also remains a constant concern, with fraud and data breaches occurring through weaknesses in third-party apps and payment infrastructure.

What This Means for the Common Indian Borrower and Spender

Credit in Every QR Code: Financial Inclusion Gets a New Face

UPI-linked credit card transactions now account for nearly 40% of all credit card payments by volume, up sharply from just about 10% at the end of FY2024.

By value, the share has also risen to 8% from 2% a year earlier, showing that these are not just small one-off payments but are growing in financial significance too.

This has made credit cards easy for daily payments, allowing for frequent, smaller purchases. 

Users of UPI-linked RuPay cards now make about 40 transactions monthly, eight times more than typical credit card users. 

This approach reaches India's massive UPI user base of over 300 million people and 50 million merchants, far beyond the fewer than 10 million point-of-sale terminals that accept traditional credit cards.

What Do Experts Say? RuPay Could Become the Dominant Credit Card Network in India

The RuPay Advantage Is Structural, Not Accidental

Head of India Financials at Bernstein said: "A combination of wider merchant acceptance and a lower MDR structure for smaller merchants has accelerated adoption." 

He added that if UPI linkage remains exclusive to RuPay, it could become the dominant network in credit cards, potentially surpassing Visa and Mastercard in transaction volumes.

Looking ahead, NPCI projects that UPI-RuPay credit volume could hit ₹2 lakh crore monthly by 2027, with Tier-2 and Tier-3 cities contributing 40% of new RuPay growth. 

The solution for Indian consumers is to link a RuPay credit card to their UPI app to earn rewards and build a credit history through the same daily scans they already make.

Conclusion

RuPay's rise is a story of smart policy, digital infrastructure, and changing consumer behaviour. With UPI as its backbone and 50 million merchants already on board, RuPay is not just competing it is redefining what a credit card can do for every Indian.

FAQs

No matter how disciplined you believe you are, the convenience of scanning and paying without physically seeing money leave your pocket often leads to overspending. Have you experienced this too?  

Yes, this is a widely recognised phenomenon known as the “pain of paying”. 

Are RuPay and UPI of India superior to other credit and debit cards?  

RuPay and UPI are generally superior in India for daily, low-value transactions due to zero merchant fees (MDR), high adoption, and instant bank-to-bank transfers without physical cards.