To provide more choices to customers, the Reserve Bank of India has suggested mandating bank and non-bank card issuers to issue debt, credit and prepaid cards on more than one network.
Customers can choose any one either at the time of issue of the card or anytime later, according to draft norms released by the Reserve Bank of India on Wednesday.
The RBI said card issuers would also be barred from signing agreements that limit their ability to tie-up with other card-networks, according to the draft.
Suggestions and feedback on the draft norms can be submitted to the RBI till August 4.
Two senior executives engaged in retail banking said the proposed changes would facilitate further digital adoption and penetration would go up.
This would increase the market size as issuers may come up with schemes to enhance use of cards in consumer purchases.
A card network is an organisation or entity that facilitates payment card transactions.
Authorised card networks in India are American Express Banking, Diners Club International, MasterCard Asia/ Pacific, National Payments Corporation of India – RuPay, and Visa Worldwide.
The directions about issuing cards across more than one network and option to customers to choose any one among the multiple card networks will be effective from October 1, 2023.
RBI said that currently the authorised card networks tied-up with banks and non-banks for issuance of debit, credit, and prepaid cards. The choice of affiliated network for a card was decided by the card issuer.
This was linked to the arrangements that the card issuers had with card networks based on bilateral arrangements.
It was observed that arrangements between card networks and card issuers (banks and non-banks) were not conducive to the availability of choice for customers, the RBI added.
