RBI New Proposed Guidelines for Card Networks: Empowering Customers and Promoting Choice in Card Networks

[TechnoFino]

On review, the RBI has observed that the existing arrangements between card networks and card issuers (banks and non-banks) limit the availability of choices for customers. As a result, the RBI has drafted a set of guidelines and is seeking feedback. It is expected that the implementation of these proposed guidelines will benefit both customers and banks.

The proposed guidelines are as follows:

1. Card issuers shall not enter into any arrangement or agreement with card networks that restrain them from availing the services of other card networks.
2. Card issuers shall issue cards across more than one card network.
3. 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 RBI has recommended that banks and card networks implement these guidelines during amendment or renewal processes and in new agreements executed from the date of this circular (5th July, 2023). The directions specified in paragraph 3(b) [2] and (c) [3] will take effect from October 1, 2023.

These guidelines empower customers to select a card network of their choice, provided that the card issuer already offers cards on multiple networks. Previously, there have been cases of banks refusing to change card networks, but after October 1, 2023, banks will be obligated to honor customer requests.

This guideline will also benefit banks as card networks will no longer be able to prevent them from issuing cards on other networks.
Here's an example to illustrate the impact:
Suppose Bank X issues the "Bank X Cosmic Credit Card" on the Visa network. Visa cannot prohibit Bank X from also offering the "Bank X Cosmic Credit Card" on Mastercard or any other network.
In a scenario where Bank X issues the "Bank X Cosmic Credit Card" on Visa, Mastercard, and Rupay networks (multiple card networks), the bank should inquire about the customer's preferred network. If a customer later decides to change their card network, the bank must respect and comply with their decision.
If Bank X issues the "Bank X Cosmic Credit Card" on a single card network, let's assume Visa, then customers cannot request Bank X to issue the "Bank X Cosmic Credit Card" on Mastercard, Rupay, or any other network.

We have voiced our concerns on various social media platforms regarding this issue, and it is reassuring to see that the RBI is paying attention. This is a positive development for all of us.

Please find attached a copy of the draft guidelines.
Link: https://www.rbi.org.in/Scripts/bs_viewcontent.aspx?Id=4280

 

[Rkr]

Overall excellent propasal by RBI.Choice of choosing card network should be in customers hand while applying or later if one wish to change.

 

[akshayhs]

after October 1, 2023, banks will be obligated to honor customer requests.

 

[akshayhs]

High time RBI also enforced banks issue virtual cards only. If a physical card is required customer can place an explicit request.

 

[nirsark]

This is one of the bravest decisions by RBI. I hope we see more Rupay cards now. 🔥🔥🔥

 

[AsB]

This can stop the monopoly of VISA and Mastercard.

 

[anonymuos]

Applies to debit cards also I hope. Would like HDFC Millennia debit card on RuPay Platinum

 

[nirsark]

Btw, I'm waiting to see American Express Platinum Rupay Credit Card

 

[AllSeeker]

Good and very welcome move.

 

[CMG]

I would like to have cards without a credit card number, CVV, and expiry date, but only with the chip and my name. The rest of the details can be shown in the app.

 

[TheTrickySid]

Btw, I'm waiting to see American Express Platinum Rupay Credit Card

 

[SSV]

On review, the RBI has observed that the existing arrangements between card networks and card issuers (banks and non-banks) limit the availability of choices for customers. As a result, the RBI has drafted a set of guidelines and is seeking feedback. It is expected that the implementation of these proposed guidelines will benefit both customers and banks.

The proposed guidelines are as follows:

1. Card issuers shall not enter into any arrangement or agreement with card networks that restrain them from availing the services of other card networks.
2. Card issuers shall issue cards across more than one card network.
3. 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.

Link: https://www.rbi.org.in/Scripts/bs_viewcontent.aspx?Id=4280

With this point No 3, it goes to show that ultimately the Customer is King ,in the current global economy.. about time..

India is now demonstrating the dynamic and vibrant economic policies as a whole, despite some hiccups (due the inherent lapses among the old genreration leaders and bureacrats)

RBI is very very brave under the new regime for the last 9 years in the recent past (edited for politically sensitive people) even though some of the decisions were backfired.
India is showcasing thier confidence at the global stage and making the presence really felt by top gobal economic powers....
Showing the confidence that was never been shown before ever...

Until now India was playing second fiddle in everything and for everyone.
Now India is leading the pack .In my view, AADHAR and UPI have changed the whole landscape...
One could imagine how much efficiency( I would say HUGE) was brought in by these two measures in almost every aspect of Financial as well as social and governance activities.
It is only going to get better provided the future leadership continues the momentum and not indulge in backward policies.

Good on you RBI for your commendable job in this respect..

 

[MusicalMind]

Good move, hope it applicable on debit cards also most banks won't allow to change variant

 

[Mritunjay]

Good move, hope it applicable on debit cards also most banks won't allow to change variant

Yes, applicable on debit, credit and prepaid cards also.

 

[John Since]

On review, the RBI has observed that the existing arrangements between card networks and card issuers (banks and non-banks) limit the availability of choices for customers. As a result, the RBI has drafted a set of guidelines and is seeking feedback. It is expected that the implementation of these proposed guidelines will benefit both customers and banks.

The proposed guidelines are as follows:

1. Card issuers shall not enter into any arrangement or agreement with card networks that restrain them from availing the services of other card networks.
2. Card issuers shall issue cards across more than one card network.
3. 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 RBI has recommended that banks and card networks implement these guidelines during amendment or renewal processes and in new agreements executed from the date of this circular (5th July, 2023). The directions specified in paragraph 3(b) [2] and (c) [3] will take effect from October 1, 2023.

These guidelines empower customers to select a card network of their choice, provided that the card issuer already offers cards on multiple networks. Previously, there have been cases of banks refusing to change card networks, but after October 1, 2023, banks will be obligated to honor customer requests.

This guideline will also benefit banks as card networks will no longer be able to prevent them from issuing cards on other networks.
Here's an example to illustrate the impact:
Suppose Bank X issues the "Bank X Cosmic Credit Card" on the Visa network. Visa cannot prohibit Bank X from also offering the "Bank X Cosmic Credit Card" on Mastercard or any other network.
In a scenario where Bank X issues the "Bank X Cosmic Credit Card" on Visa, Mastercard, and Rupay networks, the bank should inquire about the customer's preferred network. If a customer later decides to change their card network, the bank must respect and comply with their decision.

We have voiced our concerns on various social media platforms regarding this issue, and it is reassuring to see that the RBI is paying attention. This is a positive development for all of us.

Please find attached a copy of the draft guidelines.
Link: https://www.rbi.org.in/Scripts/bs_viewcontent.aspx?Id=4280

SBI ko yeh link bhejna hai pehle. Sudhar jaate hai.

 

[jack333]

Ab cashback card magnus infinia sab rupay me mangenge aur upi se lutenge 🤣

 

[Farhad sekh]

This can stop the monopoly of VISA and Mastercard.

Their duopoly was already destroyed by rupay.

 

[Abhishek012]

Ab cashback card magnus infinia sab rupay me mangenge aur upi se lutenge 🤣

Why you guys think Magnus and Infinia will launch on RuPay ?

Magnus and Infinia will continue to issue on Visa and mastercard network.

NPCI's current plan is to launch premium and few super premium cards on RuPay.

 

[Tejo]

On review, the RBI has observed that the existing arrangements between card networks and card issuers (banks and non-banks) limit the availability of choices for customers. As a result, the RBI has drafted a set of guidelines and is seeking feedback. It is expected that the implementation of these proposed guidelines will benefit both customers and banks.

The proposed guidelines are as follows:

1. Card issuers shall not enter into any arrangement or agreement with card networks that restrain them from availing the services of other card networks.
2. Card issuers shall issue cards across more than one card network.
3. 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 RBI has recommended that banks and card networks implement these guidelines during amendment or renewal processes and in new agreements executed from the date of this circular (5th July, 2023). The directions specified in paragraph 3(b) [2] and (c) [3] will take effect from October 1, 2023.

These guidelines empower customers to select a card network of their choice, provided that the card issuer already offers cards on multiple networks. Previously, there have been cases of banks refusing to change card networks, but after October 1, 2023, banks will be obligated to honor customer requests.

This guideline will also benefit banks as card networks will no longer be able to prevent them from issuing cards on other networks.
Here's an example to illustrate the impact:
Suppose Bank X issues the "Bank X Cosmic Credit Card" on the Visa network. Visa cannot prohibit Bank X from also offering the "Bank X Cosmic Credit Card" on Mastercard or any other network.
In a scenario where Bank X issues the "Bank X Cosmic Credit Card" on Visa, Mastercard, and Rupay networks, the bank should inquire about the customer's preferred network. If a customer later decides to change their card network, the bank must respect and comply with their decision.

We have voiced our concerns on various social media platforms regarding this issue, and it is reassuring to see that the RBI is paying attention. This is a positive development for all of us.

Please find attached a copy of the draft guidelines.
Link: https://www.rbi.org.in/Scripts/bs_viewcontent.aspx?Id=4280

Hdfc will suffer mostly.

Hdfc issued several card variants on rupay network already.

 

[amit90]

Good Move by RBI