Domestic Card Scheme

A domestic card scheme is a payment scheme for cards that operates primarily within a single country. It sets rules for issuers, acquirers and merchants, provides a brand that appears on cards and at checkouts, and routes authorisation, clearing and settlement for transactions in its home market. Examples include RuPay in India, Interac in Canada, Cartes Bancaires in France, girocard in Germany, Bancontact in Belgium, Elo in Brazil, mada in Saudi Arabia and Mir in Russia.

Domestic schemes coexist with international card networks such as Visa and Mastercard. Many domestic cards are co-badged with an international brand, so that the domestic network processes local transactions while the international network handles payments abroad and online with foreign merchants. Some schemes that began as domestic networks, such as UnionPay in China and JCB in Japan, have grown into international networks.

• Cost. Domestic schemes often charge lower fees and interchange than international networks, reducing the cost of acceptance for local merchants.
• Sovereignty and resilience. Governments and central banks may want domestic payments to continue even if an international network withdraws or is cut off, for example because of sanctions. Russia's Mir system was developed after international networks suspended services to some Russian banks in 2014.
• Financial inclusion. Low-cost domestic debit cards can support programmes to bring people into the banking system, as RuPay did through India's national financial inclusion drive.
• Local control. Domestic schemes can adapt rules and products to local regulation, language and payment habits, and keep transaction data within the country.
• Historical development. In several European countries, banks built shared debit networks before international brands were widespread, and these remain the main way of paying by card domestically.

A domestic scheme follows the same general four-party card model as international networks: an issuer provides the card, an acquirer serves the merchant and the scheme connects them. The scheme operator runs a switch for authorisation, clears transactions and calculates net settlement positions, which are usually settled in central bank money through the national RTGS system or a designated settlement bank. Some domestic schemes are owned by banks, some by central banks or government-linked bodies, and some are run by national payment operators. RuPay, for example, is operated by the National Payments Corporation of India, which also runs the Unified Payments Interface.

Domestic schemes commonly use EMV chip technology and contactless payments. Some have built their own specifications, while others license international standards. To work abroad, domestic schemes either rely on co-badging or sign partnership agreements with foreign networks so their cards are accepted on other networks' terminals.

Where a card carries two brands, the question of which network processes a transaction matters for cost and competition. In the European Union, the Interchange Fee Regulation gives merchants the right to set a priority network on co-badged cards, while letting the cardholder override it. In the United States, rules for debit cards require issuers to enable at least two unaffiliated networks so merchants can route transactions, a principle known as debit routing. Such rules aim to keep domestic networks competitive against larger international ones.

Domestic schemes face several pressures. International networks offer global acceptance, strong brands and rewards, which attract issuers and cardholders. Online shopping with foreign merchants requires international acceptance. The cost of investing in fraud prevention, tokenisation and mobile wallets is high for a network serving one market. Several European domestic schemes have closed or been replaced by international brands, which has prompted European initiatives to build a pan-European payment solution, including account-based and wallet-based alternatives. At the same time, the rise of instant account-to-account payments, such as Pix in Brazil and UPI in India, offers countries another route to low-cost domestic payments without a card scheme.

Central banks and regulators often oversee domestic schemes as systemically important retail payment systems. Rules may cover pricing, interchange, access for new issuers and acquirers, data localisation and operational resilience. Governments sometimes require that domestic transactions be processed locally, which can favour domestic schemes, and some public programmes, such as benefit payments, use domestic cards by default. Such policies are debated, with supporters citing resilience and lower costs and critics warning of reduced choice and innovation. The comparison with a regional card scheme serving several countries is often central to these debates.