Credit cardholders in India now have the option to choose their preferred card network, which includes Mastercard, RuPay, or Visa, when applying for a new card or renewing an existing one.
This change aligns with the Reserve Bank of India’s (RBI) efforts to expand customer choice and promote competition within the digital payments sector. In March of this year, the RBI instructed both banks and non-banks to allow customers to select the authorised card network for their credit cards. As a result, credit card issuers, particularly those serving a significant customer base, are now required to establish partnerships with multiple card networks.
Prior to this regulatory adjustment, the choice of network for a customer’s card was determined by the card issuer (bank or non-bank) and was influenced by the agreements in place between the card issuers and card networks.
Earlier, The RBI had barred card issuers from entering into any arrangement or agreement with card networks that restrains them from availing of the services of other card networks.
How would this help credit card users?
By terminating exclusive agreements between financial institutions and card issuers, the Reserve Bank of India (RBI) wants ensure that consumers have the autonomy to choose the payment network that aligns with their preferences. This regulatory action aims to enhance the standards of services provided and provide a wider range of personalized financial solutions.
“The Reserve Bank of India’s order to restrain credit card issuers from signing exclusive contracts with card networks could meaningfully benefit new customers, as well as the existing card holders. Now, customers have a choice in choosing their card network provider. Customers can choose Rupay from NPCI if they want to enable credit card payments via UPI,” said Raj Khosla, Founder & MD, MyMoneyMantra.com.
Which network would suit which user?
Adhil Shetty, CEO of BankBazaar.com, said: “Choosing the right card network depends on one’s personal needs and lifestyle. Visa and Mastercard are ideal for international transactions and premium perks. RuPay, on the other hand, is great for domestic spending and offers cost-effective solutions.”
Khosla of MyMoneyMantra.com added a close comparison between like-to-like benefits provided by two credit cards offered on different card platforms can help the users gauge the size of savings.
Khosla further noted:
• Customers can now pick a card network that fits their spend patterns and usage. Previously, banks had dedicated contracts with Mastercard, Visa, Diners Club and RuPay, while American Express continued with its own network.
• A brief comparison between like-to-like benefits provided by two credit cards offered on different card platforms can help you gauge the size of savings. Visa and Mastercard have their own distinctive offerings in terms of global acceptance, complimentary visits to airport lounges, access to premium hotel collection, golf concierge, Priority Pass, etc. People who prioritise these features can opt for a credit card based on Visa or Mastercard.
• While, on the other hand, customers who are looking for a UPI-integrated card can select a RuPay credit card that underlines their requirements.
• RuPay-based credit cards operate in a similar fashion as Mastercard and Visa credit cards. Global acceptance, a bouquet of premium features, Priority Pass, complimentary access to golf rounds are some paramount differences.