RBI proposes customers should have option to choose card network

The Reserve Bank of India on Wednesday proposed that card issuers, both banks and non-banks, should give an option to their customers to choose the card network.

Authorised card networks tie-up with banks and non-banks for issuance of debit, credit or prepaid cards.

At present, the choice of affiliated network for a card issued to a customer is decided by the card issuer and is linked to the arrangements that the card issuers have with card networks in terms of their bilateral agreements.

According to a draft circular by RBI, card issuers would be prohibited from entering into any arrangement or agreement with card networks that restrain them from availing the services of other card networks.

RBI said it is observed that arrangements existing between card networks and card issuers (banks and non-banks) are not conducive to the availability of choice for customers.

"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," as per the draft circular.

Further, it said that card issuers should issue cards across more than one card network.

Authorised card networks in India are American Express Banking Corp, Diners Club International, MasterCard Asia/ Pacific Pte Ltd, National Payments Corporation of India - Rupay, and Visa Worldwide Pte Ltd.

The central bank has sought stakeholders' comments on the draft circular till August 4.