Currently, cardholders typically do not have the freedom to choose their card network when applying for a debit or credit card. Most banks have exclusive contracts with card networks such as Visa, Mastercard, RuPayetc. and issue cards based on these agreements. India currently hosts five card networks: American Express Banking group, Diners Club International Ltd., MasterCard Asia/Pacific Pte. Ltd., National Payments Corporation of India – RuPay and Visas Limited worldwide.
From October 1, 2023, two new basic rules apply to debit and credit cards:
- Card issuers must issue cards across multiple card networks.
- Eligible customers will have the opportunity to select their preferred card network either at card issuance or at a later date.
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This choice to select a card network can be exercised by both new and existing customers. Existing customers can also choose their preferred card network provider when renewing their debit or credit card. The RBI communicated this draft proposal to card issuers, including banks and financial institutions, through a circular dated July 5, 2023.
The RBI’s draft proposal highlights that the choice of a card’s connected network is currently determined by card issuers, often driven by existing bilateral agreements between issuers and card networks. The central bank’s move aims to expand customer choice, which is currently limited due to prevailing agreements between card networks and issuers.
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