US-based card companies MasterCard and Visa have demanded a level playing field with government-backed card issuer RuPay in the government's financial inclusion scheme, Pradhan Mantri Jan Dhan Yojana (PMJDY), as they have been kept out of the programme despite their services being cheaper than that of the local card issuer.

Both companies see "invisible mandate" behind choosing RuPay as the card issuer for the scheme.

Banks are unable to do anything despite being mindful of increase in costs as there seems to be "mandate in favour" of RuPay, said Ari Sarker, co-president, Asia Pacific, MasterCard.

"It is not that nobody was interested in this space, and therefore, by default, the government was left with no choice (but to give the National Payments Corporation of India, or NPCI, the mandate to issue new cards). Banks are aware, but there is an invisible mandate that we are not able to play in that space," The Economic Times quoted Sarker as saying.

After seeing a sharp increase in cards issued by RuPay, MasterCard and Visa have asked the Reserve Bank of India (RBI) and the government to contemplate their services for the Jan Dhan Yojana, which is regarded as the world's biggest financial inclusion programme.

"There is no official mandate from the government, but yes, there is a preference for RuPay for the Jan Dhan financial inclusion scheme," said T R Ramachandran, group country manager, India and South Asia, Visa.

Services of MasterCard and Visa are priced lower than that of RuPay. MasterCard had cut prices in 2014 as it changed its business strategy from "higher margins to larger volumes", taking into account a vast increase in the number of digital transactions.

"Visa, too, is priced lower than RuPay, but the payment space in India is not driven purely by competition," said a senior official at the company.

So far, MasterCard issued a total of 18 crore credit and debit cards in India, occupying a market share of 28% in the total 63.367 crore cards in use in the country, according to Sarker.

On the contrary, RuPay, which started issuing cards only in March 2012, has increased its share to about 35% in a short span of time. Over 22.2 crore of RuPay debit cards were in circulation in November.

"The only reason RuPay has added so many is not because it is cheaper but because there is an invisible mandate from the government to issue only RuPay cards. More than half the cards issued have not been used," said the Visa official, requesting anonymity.

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