Credit Card portability rules 2023: From October 1, credit card, debit card and prepaid card customers will be able to port their networks.
Credit Card portability rules 2023: From October 1, credit card, debit card and prepaid card customers will be able to port their networks. For example, card users would be able to port from Visa to MasterCard to RuPay or to any other network or vice-versa as per their choice.
The Reserve Bank of India (RBI) in its latest circular has made a proposal that will allow customers to change their debit, prepaid or credit card networks.
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Currently, there are five credit card networks in India – Visa, MasterCard, RuPay, American Express and Diner’s Club. When the RBI’s proposal comes into effect from October 1, card users will have the choice of porting their cards from one network to another. That said, the following are details of the RBI’s proposal that you should know.
What the RBI said
The RBI’s draft circular, which is currently open for comments and feedback, mandates card issuers (banks/non-banks) to issue cards on more than one card network along with providing customers the facility to choose any one among the multiple card networks.
The draft proposal also restrains card issuers from entering into agreements that limit their ability to tie up with other card networks.
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Why this proposal
Authorised card networks currently tie up with banks/non-banks for the issuance of debit, prepaid and credit cards. However, the choice of affiliated network for a card is decided by the card issuer. This choice is also linked to the arrangements that the card issuers have with the card network.
However, as per RBI’s circular, such arrangements between card issuers and networks do not provide freedom of choice to customers.
“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,” RBI said in the draft circular.
What has been proposed
The central bank has found that it is “necessary and expedient, in the interest of payment system and public interest, to do so” to provide more choices to customers. Accordingly, the RBI has made the following proposals in the draft circular.
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- 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.
- 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.
The above instructions in points 2 and 3 shall come into effect from October 1, 2023, according to the RBI circular.
Further, the card issuers and card networks would have to ensure that the above requirements are fulfilled in the:
When can you port your card network?
The card network portability option will be included in existing agreements or at the time of renewal or in fresh agreements executed from the date of the circular. The RBI said that card issuers and card networks shall ensure to adhere to the above requirements in:
- Existing agreements at the time of amendment or renewal thereof, and
- Fresh agreements executed from the date of this circular.
