MUMBAI – India’s central bank yesterday banned global payments giant Mastercard from adding new customers from next week, in an escalation of a long-standing dispute on local data storage rules.
The Reserve Bank of India (RBI) found Mastercard to be in violation of its April 2018 circular that directed all payments data be stored exclusively in India, allowing the regulator “unfettered supervisory access” to transaction details.
Global payments service providers like Mastercard, Visa and American Express have lobbied against data localisation, citing increased costs.
“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,” said RBI in a notification.
Mastercard will indefinitely be blocked from issuing debit, credit or prepaid cards to customers in India from July 22.
However, existing Mastercard customers will not be affected, said the central bank.
Mastercard did not immediately respond to queries from AFP.
Last year, Mastercard accounted for 33% of all card payments in India, according to London-based payments start-up PPRO.
American Express and Diners Club International were also indefinitely barred from issuing new cards to customers from May by RBI for the same reasons.
Global payments card companies have faced increasing competition from India’s United Payments Interface (UPI) transactions that offer card-less and cashless payment options using phone numbers and QR codes.
A record 2.8 billion UPI transactions worth some ₹5.5 trillion (RM310 billion) took place last month. – AFP, July 15, 2021
