New debit, credit card rules from October 1: The Reserve Bank of India (RBI) has introduced a significant change for cardholders, allowing them to pick their card network provider for debit, credit, or prepaid cards.
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Effective October 1, 2023, this new regulation on cards marks a shift from the current practice where when you as a customer apply for a credit or debit card it is the card issuer who makes this selection for you, according to an ET report.
Presently, when applying for a debit or credit card, cardholders typically do not have the freedom to choose their card network. Most banks have exclusive agreements with card networks like Visa, Mastercard, RuPay, etc., and issue cards based on these arrangements. India currently hosts five card networks: American Express Banking Corporation, Diners Club International Ltd., MasterCard Asia/Pacific Pte. Ltd., National Payments Corporation of India – RuPay, and Visa Worldwide Limited.
Starting from October 1, 2023, two new key rules on debit & credit cards will be in effect:
Card issuers must issue cards across multiple card networks.
Eligible customers will have the option to choose their preferred card network, either during the card’s issuance or at a later date.
102547585This choice to select a card network can be exercised by both new and existing customers. When renewing their debit or credit cards, existing customers can also opt for their preferred card network provider. The RBI communicated this draft proposal to card issuers, comprising banks and financial institutions, through a circular issued on July 5, 2023.
The RBI’s draft proposal underscores that the selection of a card’s affiliated network is currently determined by card issuers, often driven by existing bilateral agreements between issuers and card networks.
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The central bank’s move aims to enhance customer choice, which is currently limited due to the prevailing arrangements between card networks and issuers.
