Raising India’s card game

Following the success of its local card scheme (RuPay), vast APM offering and UPI real-time payment system, India has become a beacon of growth in the global payments space.

Despite its traditional cash culture and infrastructure issues, the country is rapidly transforming the attitudes and behaviours of its 1.4 billion citizens, making it one of the world’s fastest growing e-payments markets.

The Indian Government has been central in driving the cash to e-payments migration, via central initiatives supported by the Reserve Bank of India (RBI). These have helped to make cards, digital wallets and instant payments popular purchase methods for local consumers and accelerated their acceptance by merchants.

Card use has seen substantial gains

In 2023, there were more than 970 million debit card users in India. At the same time, credit card use is on the rise. According to the RBI, the number of credit cards in circulation has grown nearly 77% in the past five years, to almost 100 million at the start of 2024.

Our own Global Payments Report 2024 showed that in 2023, credit cards accounted for 15% of India’s e-commerce and 18% of its POS transaction value – representing over US $380 billion worth of card transactions.

Looking ahead, there are opportunities to link credit cards with India’s ubiquitous UPI instant payment scheme. This means card growth could continue for some time to come – even in the face of fierce competition from digital wallets, which now make up over half of India’s transaction value.

Legislation is shaping how card payments are managed

As more consumers switch from cash to digital and card payments, India’s regulators have raised the bar on fraud and data protection. Having worked hard to encourage users to switch from cash to alternative payment methods, they don’t want to lose the ‘trust’ momentum through unnecessary risk.

In recent years, merchants have struggled to stay current with fast-moving mandates and legislation that dictate what payment methods they accept, where they store transaction data and how they authenticate purchases (all CNP transactions now require 3DS2).

Card-on-file restrictions pave the way for tokenisation

Lately, the Reserve Bank of India has been pushing to restrict card credentials access and storage, as well as enforcing network payment tokens (NPT) to be used for card-on-file (CoF) transactions, e.g., reoccurring purchases, future billing, etc. NPT will benefit both consumers and merchants in improving payment security, enhancing customer experience and increasing payment success rates.

To make it easier for cardholders to link tokens to existing accounts, the RBI extended card-on-file transactions in October 2023, allowing card issuing banks and approved institutions to handle tokens. Eligible organisations can now work with networks, such as Visa, Mastercard or Amex, to become “token requestors” that facilitate the generation of tokens and process those tokens in transactions.

How Worldpay is leading the way

Worldpay is one of the first international acquirers to offer card token solutions for domestic acquiring in India, which includes guest checkout and card-on-file for Visa, Mastercard and American Express. The solution, which is already live with a number of leading travel and airline brands, supports multiple integrations including merchants with third-party 3DS and gateway providers.

Worldpay also offers popular local payment methods, including UPI, RuPay, Net Banking and digital wallets, ensuring merchants can accept their customers’ preferred payment types.

The inclusion of network payment tokens, including one of the first in the market with a CoF functionality, means that Indian merchants can benefit from a full and compliant end-to-end domestic card acquiring solution.

Merchants don’t have to delay or compromise

Enabling seamless card-on-file transactions delivers a significant advantage for different use cases, such as bill payments and advanced bookings. At Worldpay, we’re committed to developing local acquiring solutions that can maintain a balance between customer data security and convenience, while also satisfying RBI requirements and ensuring rapid adoption for all our merchant customers in India.

By enabling network payment tokens, we help merchants empower buyers and deliver more personalised checkout experiences so they can more efficiently capture more revenue, while still maintaining compliance. With Worldpay, Indian merchants really can hold all the cards.