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Banking customers will soon have the option to decide their card network with the Reserve Bank of India on Wednesday asking banks and non-bank lenders to issue credit, debit and prepaid cards on multiple networks to give customers the freedom to choose.
“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.
Card networks include American Express, Diners Club International, Mastercard, Visa and RuPay. At present the bank decides on the network while issuing a card to its customers. To change this status, the RBI has proposed that “card issuers shall provide an option to their eligible customers to choose any one among the multiple card networks. This option may be exercised by customers either at the time of issue or at any subsequent time.”
Further, card issuers shall not enter into any arrangement or agreement with card networks that restrain them from availing the services of other card networks. Card issuers shall issue cards across more than one card network.
Seeking feedback
These changes will be effective October 1 and stakeholder feedback is invited by August 4, the RBI said.
Card issuers and card networks will have to ensure to adhere to the new requirements even for existing customers at the time of renewal. All fresh agreements executed from October will have to give customers the option to decide on the card network.
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