Mumbai: Soon, you will now be able to choose from multiple card networks at the time of being issued a card. The Reserve Bank of India (RBI) on Wednesday directed card issuers to provide an option to their eligible customers to choose from multiple card networks at the time of issue.
For existing cardholders, this option needs to be provided at the time of the next renewal.
The central bank also issued directions to card issuers not to enter into any arrangement or agreement with card networks that restrain
them from availing the services of other card networks.
This means that a card issuing bank or non-bank cannot force the card of any particular network on his customers.
Authorised card networks are American Express Banking Corp., Diners Club International Ltd., MasterCard Asia/ Pacific Pte. Ltd., National
Payments Corporation of India–Rupay, and Visa Worldwide Pte. Limited.
The authorised card networks tie-up with banks/non-banks for issuance of credit cards. Under the current framework, the choice of networkfor a card issued to a customer is decided by the card issuer (bank /
non-bank) and is linked to the arrangements that the card issuers have with card networks in terms of their bilateral agreements. The central bank noted that such arrangements existing between card networks and card issuers are not conducive to the availability of choice for customers.
However, these directives do not apply to credit card issuers with fewer than 10 lakh active cards. Similarly, card issuerwho issue credit cards on their own authorised card network have also been exempted. The new directions shall be effective six months from
Wednesday.
