RBI Requires Credit Card Issuers to Provide an Option to Customers to Choose One Among Multiple Cards

Press Release: 2023-2024/543, Dated: 05.07.2023

The RBI has placed a draft circular on arrangements with card networks on its website, seeking feedback from stakeholders regarding the issuance of debit, credit and prepaid cards. The circular aims to enhance customer choice and ensure a competitive market for card networks.

Presently, when a card is issued to a customer, the choice of an affiliated network is determined by the card issuer. This selection is based on the previous arrangements that the card issuers have with card networks, in terms of their bilateral agreements.

Upon review, the RBI observed that the existing arrangements between card networks and card issuers (banks and non-banks) do not provide sufficient options for customers. Therefore, the RBI has exercised its powers under the Payment and Settlement Systems Act, 2007 to introduce the following measures for card issuers to adhere to –

Card issuers must offer eligible customers the option to choose any one card among the multiple card networks. This choice can be made either at the time of issuance or at any subsequent time.

Card issuers are prohibited from entering into any arrangements or agreements with card networks that restrain them from availing the services of other card networks.

Card issuers must issue cards across more than one card network.

Both card issuers and card networks are expected to comply with the new requirements set forth by the RBI, which will be effective from October 01, 2023. The RBI’s measures aim to increase customer choice and promote competition among card networks, fostering a more diverse and competitive market for debit, credit and prepaid cards.

Further, any comments/feedback, if any, may be sent by email, or by post to the Chief General Manager-in-Charge, Department of Payment and Settlement Systems, Central Office, Reserve Bank of India, Mumbai, on or before August 4, 2023.

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