Credit Card: Now Choice is yours to opt for a particular network

RBI today issued a new direction to the card-issuing Authorised Payment System Providers / Participants (Banks and Non-banks) that they shall provide an option to their eligible customers to choose from multiple card networks at the time of issue.  “For existing cardholders, this option may be provided at the time of the next renewal,” the regulator said.

The authorised cards networks like American Express Banking Corp., Diners Club International Ltd., MasterCard Asia/ Pacific Pte. Ltd., National Payments Corporation of India–Rupay, and Visa Worldwide Pte. Limited, shall not enter into any arrangement or agreement with card networks that restrain them from availing the services of other card networks tie-up with banks / non-banks for issuance of credit cards. According to a new direction, authorised card issuers shall not enter into any arrangement or agreement with card networks that restrain them from availing of the services of other card networks. RBI said that the card issuers and card networks shall ensure adherence to the above requirements in existing agreements at the time of amendment or renewal thereof, and fresh agreements executed.

RBI clarified that the condition that ‘the Card issuers shall provide an option to their eligible customers to choose from multiple card networks at the time of issue’ is not applicable in the following cases.

(a) “The card issuers who issue credit cards on their authorised card network are excluded from the applicability of the circular”.

(b) Credit card issuers with several active cards issued by them being 10 lakh or less in number.*

* The above direction (b) shall be effective six months from the date of this circular.