Government efforts to promote financial inclusion have made RuPay stand out among its international peers. The payment gateway has surely helped the government achieve its social objective, and it may even end up being a profitable one, competing with global giants, sayNo other segment in the financial services industry, which impacts the masses in such large numbers, is as secretive as the cards business. Given the nature of the business —which is a near duopoly dominated by Visa and MasterCard — there is hardly anyone who has been able to get data from these two, nor have the regulators bothered to disclose. But when PM Narendra Modi spoke about the emergence of RuPay cards as an alternative to the otherwise duopolistic industry on November 6 at the Delhi Economics Conclave, it also showed how the National Payments Corporation of India (NPCI) is probably blunting the dominance of the two companies which have enjoyed high profitability for years.The evolution of RuPay as an alternative to the Masters and Visas has not only ensured that the industry gets diverse, but also makes it possible for the payments technology to be enjoyed by the less privileged, too. "Thanks to Jan-Dhan Yojana and RuPay cards, we also introduced healthy competition in the debit and credit card space," said Modi. "This has traditionally been dominated by a few international players. Even one year ago there were hardly any indigenous card brands in the market. Today, about 36 per cent of debit cards in India is RuPay."If the prime minister of a country had to talk about the 'dominance' of companies, one could imagine the hold of those companies in the space they operate. It was almost a cozy club of banks and card companies that kept the costs and fees in such confidence that consumer groups in India couldn't do much. Of course, these companies have faced class-action suits in the US and have paid billions of dollars to settle such claims.But thanks to the government initiative on financial inclusion, the NPCI, jointly owned by banks, is making strong headway in the business. It is even making private banks join the network. "The financial inclusion initiative of the government has given a big boost to RuPay," says AP Hota, MD and chief at NPCI. "We have one-thirds market share and it is growing gradually. We have 20 per cent market share in transactions and that percentage is growing month-on-month. Every day there are 10 million transactions done via cards and RuPay is at 2 million and picking up." Throw the same questions to Visa, or a MasterCard, pat comes the reply, "We cannot disclose the numbers." RuPay was launched in 2012 and was an also-ran for a couple of years before Modi's Jan-Dhan Yojana gave it new life. The government's efforts to make every household have access to bank accounts found only the state supported NPCI pick up the challenge.There are 603 million debit cards in use in India, data from the RBI shows. As of October 30, out of 222 million RuPay cards in circulation, close to 170 million cards are linked to Jan-Dhan accounts and only 52 million cards are mainstream. The remaining are from Visa, MasterCard and American Express. "The domestic card system has gained popularity and with its linkage under the Jan-DhanYojana, it has become a household name," RBI deputy governor SS Mundra said. But many accounts, those which were opened by the government for Jan-Dhan, still do not have enough deposits, and hence these cards are not being used optimally.The fact that RuPay cards are used just for 20 per cent of the overall transaction of more than 2 million a day despite there being more than 30 per cent of the cards in circulation shows that it has a long way to go. It has yet to make more money even though it has achieved its social objective. Although RuPay has the backing of the state and has seen fast growth in the recent past, rivals have been quick to criticise it."It is great that the government is opening up the market, but the market should be driven by competition rather than mandate-driven competition," Ravinder S Aurora, MasterCard Group head and senior vice-president said recently. "It's a concern that sometimes the competitor becomes the regulator." But RuPay has proved to be economical to users.It is also helping private banks to issue more RuPay cards in rural areas where there is spending potential given how deposits have crossed Rs 26,000 crore in Jan-Dhan accounts.Industry sources say that for every point of sale and e-commerce transaction RuPay charges a fixed fee of 90 paise — 60 paise from the issuing bank and 30 paise from the acquiring bank. Visa and MasterCard charge on an ad valorem basis — a certain percentage of the value of transaction.On an average, Visa and MasterCard would charge Rs 3 per transaction. RuPay charges 45 paise per ATM transaction. RuPay says there is no special treatment and it has only taken up business opportunities that others were not keen on because of lower profitability."Neither the RBI nor the government aims to favour anyone," says Hota of NPCI. "The government wanted PMJDY cards to be done in a period of one year and we gave 170 million cards. I wonder if Visa and MasterCard could have achieved this. The government wanted us to do Mudra cards. In just one week we did the design, issuance and product rollout of the cards.Who could have done this? I wonder if they (Visa and MasterCard) could have done this within 6 months."Has RuPay become a threat to the established one? "The payments industry in India is not a market-share game — it is about growing the market," says TR Ramachandran, group country manager at Visa.RuPay, which until now has been a poor cousin of Master and Visa, is upping the game in other segments as well. NPCI plans to roll out credit cards by June next year. The company has also tied up with China UnionPay, Japan-based JCB Co and Discover Financial services which would allow RuPay card holders to use their cards in other parts of the world.It has tied up with over 12 banks including HDFC Bank & ICICI Bank for international cards. It plans to launch platinum cards with a lot of benefits rolled into one for those high-value customers who are mostly with either Visa or MasterCard.Whether RuPay manages to turn the tables or not, it has for the time being stopped the biggies in their tracks.