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Report: Competition heats up between local, national debit networks

January 9, 2014

A new report from Mercator Advisory Group, "National Debit Networks: When Global Goes Local," offers an understanding of national debit networks, the rationale for their creation, and the threats and benefits they pose to the existing global payment networks. 

Debit card networks have taken hold in both developed and developing markets. Intracountry debit networks have been created to reduce costs, allow for better customized product development, offer more controls for local banks, and protect customer data. More than 20 national debit networks exist, the majority of them in Europe. 

Some national debit networks also claim to be better positioned to provide financial inclusion of underserved customers. A new national debit network has been created in India with this object in mind; others are being considered in Europe, Asia, Africa, and Latin America. Growing interest in new national and regional networks might cause long-lasting changes to the payments landscape. 

"A prime example of a recent national debit network that differs from some earlier national debit networks along the lines of financial inclusion is RuPay in India," said Ron Mazursky, director of debit advisory service at Mercator Advisory Group and primary author of the report. 

"At the heart of this difference is the combination of a large underserved population with a need for financial inclusion and a governmental need for cost-effective electronic benefits disbursement. This could be indicative of future developing markets and the needs a national debit network can serve." 

One of nine exhibits in the 25-page report:

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