RBI directs credit card issuers to offer multiple network options to customers
Upstox
2 min read • Updated: March 6, 2024, 11:31 AM
Summary
The directions are not applicable to credit card issuers with less than 10 lakh active cards. Also, card issuers who issue credit cards on their own authorised card network are excluded from the applicability of the circular.
The Reserve Bank of India (RBI) on Wednesday directed credit card issuers to not enter into a tie-up with card networks and allow customers to choose the card network at the time of issue.
Presently, authorised card networks partner with card issuers like banks or non-bank institutions to issue credit cards. The card issuers select the choice of network for a card issue to the customer.
In a circular, RBI said, "On a review, it is observed that some arrangements existing between card networks and card issuers are not conducive to the availability of choice for customers."
Upon review, the RBI directed:
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Card issuers will not enter into any arrangement or agreement with card networks that restrain them from availing the services of other card networks.
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Card issuers will provide an option to their eligible customers to choose from multiple card networks at the time of issue. This option may be provided for existing cardholders at the time of the next renewal.
Authorised card networks include Diners Club International Ltd, American Express Banking Corp, MasterCard Asia/ Pacific Pte Ltd, Visa Worldwide Pte Limited and National Payments Corporation of India–Rupay.
It should be noted that the directions are not applicable to credit card issuers with less than 10 lakh active cards issued. Also, card issuers who issue credit cards on their own authorised card network are excluded from the applicability of the circular.