Mumbai: Mastercard Inc. can add new customers after the Reserve Bank of India removed restrictions on the firm, effective immediately, citing compliance with data-storage rules.
The decision announced Thursday, which comes almost a year after the curbs were imposed, highlights the authority’s focus on digital banking. Data generated by millions of Indians in the world’s biggest open consumer market would be a rich resource, and rules announced in 2018 order payment-systems providers to store all data generated within India on servers located in the country.
“We welcome and are grateful for today’s decision by the Reserve Bank of India (RBI), enabling us to resume onboarding of new domestic customers (debit, credit and prepaid) onto our card network in the country with immediate effect,” Mastercard said in an emailed statement. “As we have in our engagement with the RBI, we reaffirm our commitment to support the digital needs of India, its people and its businesses.”
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India had 995 million cards issued as of April, of which 75 million are credit cards and the rest debit, according to RBI data. Average credit-card spending on e-commerce was three times higher than average debit-card payments in April, pointing to the increased popularity of deferred payments in “buy now, pay later” transactions, according to an article in the central bank’s monthly bulletin published Thursday.
Visa and Mastercard are the two biggest players in the credit-card market, while home-grown Rupay has emerged as one of the leading debit-card issuers. Rupay, which also issues credit cards, may pose a bigger challenge to the incumbents as the first provider to be allowed to connect its product to India’s popular UPI digital-payments system, which has more than 260 million users, according to the central bank.
“We are glad we have met this milestone and will continue to ensure ongoing delivery against the goals and regulatory requirements that have been established,” Mastercard said. “India is an important market for us.” -Bloomberg
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