New debit credit card rules: How bank customers will benefit from this RBI proposal of card portability
This rule challenges the existing practice where card network options are predetermined by agreements between issuers and networks
The Reserve Bank of India (RBI) has introduced a draft rule that empowers debit, credit, and prepaid card users to select their preferred card network, marking a potentially groundbreaking development worldwide.
This rule challenges the existing practice where card network options are predetermined by agreements between issuers and networks.
According to a draft circular by RBI, card issuers would be prohibited from entering into any arrangement or agreement with card networks that restrain them from availing the services of other card networks.
RBI said it is observed that arrangements existing between card networks and card issuers (banks and non-banks) are not conducive to the availability of choice for customers.
While this draft holds significant advantages for customers, granting them decision-making authority and portability, banks may face operational challenges and increased costs.
Customers are the real beneficiaries considering going forward the card issuer has to provide more than one card network and offer the option to choose at the time of issuance or subsequently.
Authorised card networks tie up with banks/ NBFCs for the issuance of cards. MasterCard and Visa are among the most popular networks in India.
Other authorised card networks in India include American Express Banking Corp, Diners Club International, and National Payments Corporation of India - Rupay.
