RBI Proposes Customer Choice Of Card Network In Debit, Credit, And Prepaid Transactions

The Reserve Bank of India (RBI) has recently proposed a new regulation that would allow customers to select the card network of their choice for debit, credit, and prepaid card transactions, Reuters Reported.

"On a review, 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," the RBI said in a draft circular seeking comments.

Customers in India have access to services via the American Express (AXP.N), Diners Club International (DCI), Mastercard (MA.N), Visa (V.N), and locally built RuPay networks; however, the service provider is often chosen by the bank based on the card issued.

The RBI stated in a circular that card issuers should issue cards across several networks and that financial institutions should give their eligible customers the opportunity to select from the various card networks in the nation.

Customers may exercise such choice at the time of issuance or at a later time, it was added.

The RBI stated that stakeholder feedback is requested by August 4 and that these modifications will take effect on October 1.

The central bank further advised card issuers not to enter into any agreements or arrangements with card networks that prevent them from using the services of other card networks.