Reserve Bank of India blocks Mastercard from onboarding new domestic customers
The Reserve Bank of India (RBI) has dealt a blow to Mastercard in the country, ruling that from 22 July it will impose restrictions on Mastercard Asia/Pacific from onboarding new domestic customers (debit, credit or prepaid) onto its card network.
The move will not impact existing customers of Mastercard
The RBI states that: “Notwithstanding lapse of considerable time and adequate opportunities being given, the entity has been found to be non-compliant with the directions on Storage of Payment System Data.”
Those directions, issued in April 2018, basically state that payment system providers must ensure that all data relating to payment systems operated by them is stored in a system only in India.
That data includes full end-to-end transaction details; information collected, carried and processed as part of the message; and payment instructions.
The directions also state providers are required to report compliance to the RBI and submit a board-approved System Audit Report within specified timelines.
The move will not impact existing customers of Mastercard. The company is instructed to advise all card issuing banks and non-banks to conform to the directions.
Mastercard is a Payment System Operator authorised to operate a card network in the country under India’s Payment and Settlement Systems Act, 2007 (PSS Act).
The card companies, with backing from the US government, are opposed to the restrictions and have been lobbying to have them lifted. In April, the RBI similarly restricted American Express and Diners Card from adding new customers, citing violation of the same rules.
