Mastercard, Visa Or RuPay? Customers Must Have Option To Choose: RBI Guidelines


Sheetal Bhalerao

Sheetal Bhalerao

Mar 08, 2024


In a recent development, the Reserve Bank of India (RBI) has directed card issuers and  banks to refrain from entering into exclusive contracts with card networks that limit their ability to utilize other networks.

Mastercard, Visa Or RuPay? Customers Must Have Option To Choose: RBI Guidelines

New Credit Card Rules

Basically, the decision was taken following a review conducted by the Reserve Bank of India (RBI), which found that certain agreements between card networks and issuers were not conducive in supporting consumers’ freedom of choice.

“The authorized card networks tie-up with banks / non-banks for issuance of credit cards. The choice of network for a card issued to a customer is decided by the card issuer (bank / non-bank) and is linked to the arrangements that the card issuers have with card networks in terms of their bilateral agreements,” as per the RBI press release on March 5, 2024.

Considering the current scenario, when users submit an application for a debit or credit card then typically they are not provided with the option to select the network provider as it’s determined by the card issuer. 

But now, it seems that the regulator is poised to overhaul this procedure.

In this release, RBI has instructed these benefits in the payment system and the public interest.

According to this, “Card issuers shall not enter into any arrangement or agreement with card networks that restrain them from availing the services of other card networks. Card issuers shall provide an option to their eligible customers to choose from multiple card networks at the time of issue. For existing cardholders, this option may be provided at the time of the next renewal. For the purpose of these directions, the following definitions are used: Authorized card networks: American Express Banking Corp., Diners Club International Ltd., MasterCard Asia/ Pacific Pte. Ltd., National Payments Corporation of India–Rupay, and Visa Worldwide Pte. Limited.”

Applicability For The New Credit Card Rule

It appears that the above-mentioned credit card rules will be effective six months from the date of this circular, which will be September 6, 2024.

The story started on July 5, 2023, when a draft circular was released by the central bank in which the bank asked the card issuers i.e., banks and finance companies to allow customers to have more than one card option and allow them to opt for their desired network provider for their debit and credit cards.

Typically, the banks have an exclusive arrangement with any of the card networks such as Visa, Mastercard or RuPay, etc. 

The banks issue cards on their preferred network in this arrangement.

Now, RBIhas clearly noted in its draft circular “Card issuers shall provide an option to their eligible customers to choose any one among the multiple card networks. This option may be exercised by customers either at the time of issue or at any subsequent time.”

Please note here that above does not apply to credit card issuers with 10 lakh or less active cards.

This circular is not applicable to the card issuers that issue credit cards through their own approved card network.


Sheetal Bhalerao
Sheetal Bhalerao
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