Indian banks plan rival to Visa/Mastercard

Just as has happened in Japan with the JCB card network, it seems that Indian banks are getting sufficiently cheesed off with the Visa/Mastercard cosy oligopoly that they are developing their own country-specific card system.

Known as India Pay, the plan is to get all members of the Indian Banks Associations to issue cards and, perhaps more importantly, process the transactions at rates below those of Visa/Mastercard.

Sears did something similar in the US with its Discover card, but the card take-up isn't that great.

However, the IBA has great plans for India Pay, as it expects the volume of all card transactions in India to increase by 300 per cent over the next five years.

The key to its success, the IBA says, is that a domestic Indian card payment settlement company would save the banks and retailers the commission payments they currently pay to Visa and Mastercard, and so save the banks and cardholders a small fortune.

Could it happen here? It could - all it takes is for one or two banks to start issuing their own cards and we could see a cut-price domestic UK card system appearing before you know it...