For nearly three decades international card networks, VISA and Mastercard, have maintained their duopoly in the Indian market. Recent reforms, within the financial regime of the country (India), have introduced domestic payment network solutions to cut down on the dependency on the card networks. These solutions have come in the form of IMPS, UPI and RuPay (domestic card network) among others. Now, this became a challenge for international players in sustaining their market share, and hence revenues, amidst changes in customer and systemic sentiments towards an unprecedented increase in the adoption of domestic solutions. There was a need for immediate attention to the diminishing revenues to maintain its foothold in the market.
Situational Analysis
The Indian government had laid the road for securing its data and asked the financial companies to save the data locally for all transactions and customers (for Indian business).
With the unprecedented growth in the market, the shares of newly launched payments services quickly escalated to 60% by market share and 65% by value.
RuPay had washed off 20% of the physical card market, both by volume and transaction value.
Payment innovations, IMPS and UPI, made the transaction process seamless and almost free of cost.
Research Methodology
Secondary research was done to understand the current state of the Indian banking industry and its various customer segments.
Alongside retail customers, the business customer segment was also assessed for need and available solutions in use.
Primary interviews were done, with senior leadership from all banking segments vis-à-vis private, public, rural and international banks.
The research helped better understand the trends, gaps, and potential challenges in the industry thereby exposing potential and sizeable opportunities.