Reserve Bank of India (RBI) gives card users the power to select their own card network, akin to porting mobile networks. This means that customers of debit, credit, and prepaid cards have the freedom to switch between service providers – from Visa to Mastercard, RuPay, or any other provider of their choice. Starting from October 1, users can freely port their network between credit and debit cards.
How did this come about? The RBI recently issued a circular empowering users with the ability to pick a card network for their debit, credit and prepaid cards. This marks a significant departure from the standard practice, where agreements between issuers and networks predetermined card network choices.
So, what does “card network portability” mean? Simply put, card network portability provides consumers the capacity to switch their card accounts from one network to another. Drawing parallels with switching mobile providers without changing phone numbers, customers can now transfer their cards to a different payment network, while keeping their original card account, balance, and credit history intact.
Traditionally, when a user applied for debit or credit cards, they were usually not given an option to choose their network provider, which was essentially chosen by the card issuing bank or institution.
The five card networks that are authorized in India are – American Express Banking Corp., Diners Club International Ltd., MasterCard Asia/Pacific Pte. Ltd., National Payments Corporation of India – RuPay and Visa Worldwide Pte. Ltd.
Until now, issuances of debit or credit cards were stamped with the logos of Visa, MasterCard, Diners Club, or RuPay – and you had no say in selecting which one. This is because it was always the bank that chose the card network provider for you. However, that is soon about to change.
The RBI tersely observed that the existing arrangement between card networks and card issuers, which include banks and non-banks, did not benefit customers with an option to exercise their choice. But with the RBI’s intervention through the new circular, consumers are now placed in the driver’s seat, marking a significant power shift from banks to the average user.
In conclusion, the RBI’s move to enable card network portability is expected to usher in a new era of customer-choice-driven banking landscape, taking a massive leap toward enhancing consumer rights and satisfaction. With this new policy, users now have the freedom to select a card network of their preference, paving the way for fair competition among service providers and, ultimately, improving the overall customer experience.
