According to someone who knows about the situation, the National Payments Corporation of India (NPCI) has started giving banks money to promote RuPay credit cards. This is part of a plan to speed up the use of domestic payment systems and challenge the dominance of global card schemes.
This adjustment from NPCI’s previous strategy of delivering lower settlement rates puts it in line with Visa and Mastercard, both of which have long offered incentives to banks that issue cards.
As an incentive, NPCI is now giving back some of the 25–40 basis point charge it gets from every RuPay credit card swipe to the banks who issued the cards. According to an ET story, a top lender said, “NPCI is becoming very competitive and is pushing domestic payment methods aggressively.”
According to the financial daily, the incentive structure is dependent on the amount of the transaction. Large private banks are thought to be getting good terms, maybe between 10 and 12 basis points. Banks see this incentive as non-interest revenue, which makes it better than fee reductions.
RuPay credit cards have been around for a while, but their popularity skyrocketed once the Reserve Bank of India permitted them to be connected to the Unified Payments Interface (UPI) in 2022. This feature is still not accessible for Visa or Mastercard credit cards.
“Global card schemes have long offered business incentives to banks including cashbacks based on issuance volumes and transactions per card. NPCI is now adopting a similar strategy,” said the founder of a credit card startup, requesting anonymity.
According to the analysis, India had 111 million credit cards in use by May 2025, up from 55 million in December 2019. According to industry estimates, RuPay now makes up over 10% of all credit card spending each year, with transactions worth around Rs 20,000 crore.
NPCI’s top objective is to promote RuPay credit cards since its main products, RuPay debit cards and UPI, don’t directly make money for banks. Credit cards, on the other hand, make money via interchange fees and help businesses stay open.
Kiwi, a fintech firm that distributes RuPay credit cards in conjunction with multiple banks, says that RuPay’s market share by issuance climbed from 3% in 2023 to 12% in 2024. Major banks and companies, like as PhonePe, Super.Money (sponsored by Flipkart), and Tata Neu, have been launching both conventional and co-branded products, which has led to the rise.
SBI Card, one of the biggest issuers in the nation, said in its FY25 results that the average monthly UPI-linked expenditure using RuPay credit cards had gone up to Rs 18,000 in tier-two and smaller towns and Rs 14,800 in metro areas, up from Rs 11,000 in April 2024.
“The financial benefits, more than any government push, are what’s prompting private banks to embrace RuPay credit cards,” the senior banker cited earlier told ET.
NPCI said that its standalone income for FY24 was Rs 3,270 crore, up 24% from Rs 2,749 crore the year before. Its net surplus was Rs 1,552 crore.