A potentially game-changing discovery has been made by The bank OF INDIA' target='_blank' title='reserve bank of india-Latest Updates, Photos, Videos are a click away, CLICK NOW">reserve bank of india (RBI), which has pioneered a groundbreaking regulation that allows holders of debit, credit, and prepaid cards to choose their preferred card network. The current practice of having agreements between issuers and networks predetermine card network alternatives is challenged by this rule.
The RBI proposal for debit and credit cards
Card issuers will not be allowed to enter into any arrangement or agreement with card networks that prevent them from using the services of other card networks, according to a new RBI circular.
According to the RBI, existing agreements between card networks and card issuers (banks and non-banks) do not promote a wide range of options for users. "Card issuers should provide eligible customers the choice to select any one of the many card networks. customers may choose this choice either at the time of issuance or at any time in the future, according to the draught circular.
The RBI proposal for debit and credit cards
Card issuers will not be allowed to enter into any arrangement or agreement with card networks that prevent them from using the services of other card networks, according to a new RBI circular.
According to the RBI, existing agreements between card networks and card issuers (banks and non-banks) do not promote a wide range of options for users. "Card issuers should provide eligible customers the choice to select any one of the many card networks. customers may choose this choice either at the time of issuance or at any time in the future, according to the draught circular.
What is the portability of a card network?
Consumers' ability to move their card accounts from one network to another is referred to as card network mobility. Card network portability enables cardholders to preserve their current card accounts, balances, and credit histories while changing payment networks, much to how we may change mobile service providers while keeping our current phone numbers.
"This freedom gives customers the power to select the network that best meets their requirements, whether that decision is made in light of things like rewards programs, acceptance, or customer service. According to amit Gupta, MD of SAG Infotech, it increases competition among credit card networks and provides consumers greater power over their financial decisions. The central bank has sought stakeholders' comments on the draft circular till august 4.
Consumers' ability to move their card accounts from one network to another is referred to as card network mobility. Card network portability enables cardholders to preserve their current card accounts, balances, and credit histories while changing payment networks, much to how we may change mobile service providers while keeping our current phone numbers.
"This freedom gives customers the power to select the network that best meets their requirements, whether that decision is made in light of things like rewards programs, acceptance, or customer service. According to amit Gupta, MD of SAG Infotech, it increases competition among credit card networks and provides consumers greater power over their financial decisions. The central bank has sought stakeholders' comments on the draft circular till august 4.
The suggestion by the RBI is a significant move, according to Ranadurjay Talukdar, Partner and Payments Sector leader at EY India, as it would provide customers more options while also terminating exclusive issuance agreements that card networks have with major issuers. As UPI is unquestionably the greatest credit-related offering from the Rupay network, this will provide banks the much-needed impetus they need to issue credit cards on the platform. On the debit side, Rupay presently accounts for the majority of the issuance volume, and the majority of PSUs automatically issue Rupay cards. Similarly, on the credit side, a number of private sector banks who now only accept Visa or Mastercard may now need to diversify to include a Rupay option, according to Ranadurjay Talukdar.
RBI's plan for card network portability might present operational difficulties for banks.
Customers will benefit greatly from this approach by being given decision-making power and mobility, while banks may have operational difficulties and higher expenses. They will need to assess current contracts, form new alliances, modify their client onboarding procedures, arrange for further training, and reevaluate consumer profiling. In the upcoming months, the effect on the production of all financial cards will be assessed, according to Anadurjay Talukdar.
RBI's plan for card network portability might present operational difficulties for banks.
Customers will benefit greatly from this approach by being given decision-making power and mobility, while banks may have operational difficulties and higher expenses. They will need to assess current contracts, form new alliances, modify their client onboarding procedures, arrange for further training, and reevaluate consumer profiling. In the upcoming months, the effect on the production of all financial cards will be assessed, according to Anadurjay Talukdar.
RBI's plan for card network portability might present operational difficulties for banks.
Customers will benefit greatly from this approach by being given decision-making power and mobility, while banks may have operational difficulties and higher expenses. They will need to assess current contracts, form new alliances, modify their client onboarding procedures, arrange for further training, and reevaluate consumer profiling. In the upcoming months, the effect on the production of all financial cards will be assessed, according to Anadurjay Talukdar.
Customers will benefit greatly from this approach by being given decision-making power and mobility, while banks may have operational difficulties and higher expenses. They will need to assess current contracts, form new alliances, modify their client onboarding procedures, arrange for further training, and reevaluate consumer profiling. In the upcoming months, the effect on the production of all financial cards will be assessed, according to Anadurjay Talukdar.