RBI Draft Circular on Arrangements with Card Networks for issue of Debit, Credit and Prepaid Cards
As per the new circular,
Card issuers shall not enter into any arrangement or agreement with card networks that restrain them from availing the services of other card networks.
Card issuers shall issue cards across more than one card network.
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.
This circular prohibits banks from making exclusive arrangement with card issuers.
Except for RuPay Cards, there is a Merchant Discount Rate ( MDR ) for all other card networks.
MDR is charged to a merchant for the payment processing of debit and credit card transactions. MDR charge is payable by the merchant to his bank ( Acquirer). A portion of this is shared by the acquirer bank with the card issuing bank and the card network operator.
At present there is no MDR on RuPay Debit Card. This circular along with zero MDR is expected to further the promotion of RuPay Debit card in Indian Card segment.
This circular mandates Banks to give customers the option of choosing card network among operators. Even after issuing the card, this circular mandates banks to give customers the option of portability between card networks.
This circular also mandates banks to issue cards across more than one card network.
Recently, the RBI allowed linking of RuPay credit cards to the UPI network.
Economic Times, RBI
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