BusinessIndia bans Mastercard from issuing new cards

India bans Mastercard from issuing new cards

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Mumbai, India: In an escalation of a long-running conflict over local data storage laws, India’s central bank blocked global payments firm Mastercard from adding new clients beginning next week.

Mastercard was found to be in violation of the Reserve Bank of India’s (RBI) April 2018 circular, which mandated that all payments data be maintained exclusively in India and that the regulator have “unrestricted supervisory access” to transaction details.

Global payment service providers such as Mastercard, Visa, and American Express have fought against data localization, citing higher costs as a reason.

“Notwithstanding (the) lapse of considerable time and adequate opportunities being given, the entity (Mastercard) has been found to be non-compliant with the directions of Storage Payment System Data,” the RBI said in a notification.

From July 22, Mastercard will no longer be able to issue debit, credit, or prepaid cards to clients in India.

Existing Mastercard clients will not be affected, according to the central bank.

Mastercard did not react to AFP’s questions right away.

The financial service provider is among the top players in the Indian market, where hundreds of millions of debit and credit cards are issued with them in partnership with Indian banks.

According to London-based payments firm PPRO, Mastercard accounted for 33% of all card payments in India last year.

For the same reasons, the RBI stopped American Express and Diners Club International from issuing new cards to clients indefinitely beginning in May.

Global payment card firms are facing rising competition from India’s United Payments Interface (UPI) transactions, which use phone numbers and QR codes to enable card-less and cashless payment options.

In June, there were a total of 2.8 billion UPI transactions totaling 5.5 trillion rupees ($73.8 billion).

Debayan Paul
Debayan is a freelance digital reporter and Editor-in-chief of We The World Magazine. Contact: communications@wetheworldmagazine.com

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