New Delhi: When applying for a new credit card or renewing an existing one, Indian credit cardholders will have the freedom to select their preferred card network (Mastercard, RuPay, or Visa) September 6 onwards. This change is due to the Reserve Bank of India‘s (RBI) recommendations, which seek to improve user experience and promoting competition in the digital payments market.
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You generally do not get an option to select the card network when applying for a credit or debit card. Usually, your bank has a special agreement with one or more card networks such as Visa, Mastercard, RuPay, etc. Thus, cards are issued by banks on their preferred network. RBI had stated in its draft circular that eligible users must be provided a choice by their card issuers to choose any one among the various card networks. Customers can access this option either at the time of issue or at any subsequent time.
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It’s crucial to note that above does not apply to credit card issuers with 10 lakh or less active cards. The circular does not apply to card issuers that issue credit cards through their own approved card network.
Banks and non-bank card issuers were restrained from entering into special agreements with card networks by RBI in its circular issued on March 6. The central bank desires that both banks and non-banks allow their customers to select from a variety of card networks.
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Important Points
- Advantages for Cardholders: Benefits like better convenience, exclusive offers and wider acceptance can be availed by choosing your preferred network.
- Implementation by Banks: The new guidelines have already been implemented by various banks including YES Bank and Bank of Baroda.
- Exemption for American Express: American Express is not subject to the RBI’s regulations because it runs its own network.
- Aim of RBI’s guidelines: The objective of RBI’s guidelines is to drive competition among networks on fees, benefits and customer experience and liberalize the credit card industry.
