Indian’s banking regulator and global payments services giant Mastercard have been at odds for a while over the issue of data storage rules. The long-standing dispute reaching a tipping point with the Reserve Bank of India banning Mastercard from issuing new credits, debits or prepaid cards to customers from next week.
The news comes as a major blow to the payments company which had earlier been bullish about its plan in India in the coming years. Here’s 7 things about India’s ban on Mastercard that you should know:
- The ban on Mastercard issuing new cards or adding new customers will be enforced from July 22 and is an indefinite one.
- As per India’s central bank, the ban is due to non-compliance by Mastercard with directions given by it in an April 2018 circular to store all payments data exclusively in India.
- While RBI seeks “unfettered supervisory access” into transaction details, payments companies Mastercard, Visa and American Express haven’t taken well to the data localisation ask.
- Mastercard ban is the third such incident in less than 3 months after RBI issued similar bans on American Express and Diners Club International for similar violations.
- Mastercard has many Indian banks as partners issuing credit and debit cards powered by its platform to their customers.
- The move is a major setback for Mastercard, which had earmarked $1 billion for investment in India over the next 5 years in 2019.
- As per the RBI, existing customers of Mastercard will not be affected by the ban.