India is asking its banks to end exclusive arrangements with credit card networks.
of reserve bank of india (RBI) – the country’s central bank and banking supervisory body – announced the move on its website on Wednesday (March 6), saying it had concluded that some of these partnerships were not something it could deliver. Appropriate choice for consumers.
“Card issuers shall not enter into any arrangement or agreement with a card network that restricts the availability of services of other card networks,” RBI said on its website.
“Card issuers shall offer eligible customers the option to choose from multiple card networks at the time of issuance. Existing cardholders may be offered this option at their next renewal. ”
RBI has said that banks will now have to offer customers the option to choose from multiple card networks when issuing new cards. Existing cardholders can choose their network during renewal. Card issuers with less than 1 million active cards are not affected. Issuers with their own authorized card networks are also unaffected.
A Bloomberg News report on Wednesday characterized the RBI move as follows: surprising decisionstates that it may affect. visa and master Card It has the highest number of users in India as it collects fees based on what the card offers, including usage abroad. American Express uses its own network and could be largely exempt from this rule, the report said.
PYMNTS has reached out to Visa for comment but has not yet received a response.
A Mastercard spokesperson said the company supports the RBI’s “efforts to increase choice for cardholders.”
The news follows a number of reports that Visa and Mastercard have suspended intermediary commercial card payments in India after the RBI directed both companies to suspend domestic transactions for business payment solution providers (BPSPs). It was announced a week later.
“Visa received communication from the RBI on February 8th in what appears to be an industry-wide request for information regarding the role of business payment solutions providers in commercial and corporate payments,” a Visa India spokesperson said. he told Reuters at the time.
The move may be tied to RBI’s efforts to halve the flow of funds to merchants that do not undergo know-your-customer (KYC) processes.
In card-related news, this week the U.S. Consumer Financial Protection Bureau (CFPB) released a final rule lowering late payment fees for credit cards, reducing the standard fee from $32 to $8.
