RBI allows Mastercard to onboard new customers

The Reserve Bank of India (RBI) has lifted restrictions on Mastercard Asia Pacific Pte. Ltd., allowing the American financial services firm to issue new debit and credit cards in the country.

This comes nearly 11 months after the banking regulator barred Mastercard from onboarding new domestic customers (debit, credit or prepaid) onto its card network from July 22, 2021, for non-compliance with the local data storage norms.

"In view of the satisfactory compliance demonstrated by Mastercard Asia/Pacific Pte. Ltd. with the Reserve Bank of India (RBI) circular dated April 6, 2018 on Storage of Payment System Data, the restrictions imposed, vide order dated July 14, 2021, on on-boarding of new domestic customers have been lifted with immediate effect," the RBI says.

Mastercard was the third US card network that was barred by the RBI from adding new customers. In April 2021, the banking regulator had banned Diners Club International and American Express (Amex) from onboarding new customers from May 1, 2021.

While the RBI lifted restrictions on Diners Club in November 2021, the ban on Amex still continues. This directive, however, does not impact the services offered to existing cardholders.

The Reserve Bank, as part of its data storage guidelines issued in 2018, had said that all system providers shall ensure that the entire data relating to payment systems operated by them are stored in a system only in India.

This data includes the full end-to-end transaction details, information collected, carried, and processed as part of the payment instruction.

It is observed that not all system providers store the payments data in India. In order to ensure better monitoring, it is important to have unfettered supervisory access to data stored with these system providers as also with their service providers, intermediaries, third party vendors and other entities in the payment ecosystem, the regulator had said, giving card networks six months to comply with these norms.

In recent times, there has been considerable growth in the payment ecosystem in the country. Such systems are also highly technology dependent, which necessitate adoption of safety and security measures on a continuous basis, the central bank had said.

In its monetary policy statement earlier this month, the RBI proposed to allow linking of credit cards to UPI, starting with Rupay credit cards. The arrangement is expected to provide more avenues and convenience to customers in making payments through the UPI platform, the RBI said, adding that this facility would be available after the required system development is complete.

Meanwhile, the central bank also enhanced the limit on recurring payments from ₹5,000 to ₹15,000 to facilitate payments of larger value subscriptions like insurance premia and education fee. The banking regulator had received requests from various stakeholders to increase the limit under the framework in an effort to offer convenience to customers.