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Friday, February 23, 2024

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Mastercard: India Stops Payment Service Provider From Issuing Cards

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India’s central bank has barred Mastercard indefinitely from issuing new debit or credit cards to domestic customers.

The Reserve Bank of India (RBI) has accused Mastercard since the company has not complied to the rules requiring foreign card networks to store data on India payments exclusively in India. The company has not responded yet.

As of 22 of July, Mastercard will not be able to issue debit, credit or prepaid cards to customers as per the decision of the Reserve Bank. The latter has accused that since that Mastercard has violated a 2018 order concerning payment data to be stored in India.

The RBI stated in a notification, “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.”

Last year, the company accounted for 33% of all card payments in India. In 2019, the firm had announced an investment of a billion of dollars over a five year plan as part of its expansion plans in India.

Earlier this year, American Express and Diners Club were also prevented from issuing cards due to similar reasons. Those US firms have been against the 2018 order as they stated that this will increase their costs for doing business in India but the RBI had not changed its decision.

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