The Reserve Bank of India (RBI) has barred MasterCard from acquiring new customers (debit, credit or prepaid) from July 22 for not complying with data localisation requirements.

In a statement, the central bank said that MasterCard is required to advise all card-issuing banks and non-banks to conform to these directions.

“Notwithstanding lapse of considerable time and adequate opportunities being given, the entity has been found to be non-compliant with the directions on Storage of Payment System Data. This order will not impact existing customers of MasterCard,” the RBI statement said.

The RBI, through an April 23 order, had imposed similar restrictions on American Express Banking Corp and Diners Club International Ltd from on-boarding new domestic customers onto their card networks from May 1.

Mandatory data storage

The central bank had made it mandatory for banks to store all the data relating to payment systems in India. For the foreign leg of the transaction, if any, the data could also be stored abroad, if required. The data includes end-to-end transaction details, information collected, carried and processed as part of the message/payment instruction.

Further, they were also required to report compliance to the RBI and submit a Board-approved System Audit Report conducted by a CERT-In empanelled auditor within a set timeline.

MasterCard did not comment on the RBI action.

The RBI action may benefit homegrown payment gateways especially those running on the UPI platform. Market experts said that there won't be any impact on consumers as banks can switch to Visa or RuPay for issuing cards. Existing MasterCard users can continue to use their cards.

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