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Nasscom’s Feedback to RBI on Draft Circular on Arrangements with Card Networks for issue of Debit, Credit and Prepaid Cards
Nasscom’s Feedback to RBI on Draft Circular on Arrangements with Card Networks for issue of Debit, Credit and Prepaid Cards

August 4, 2023

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In July, Reserve Bank of India (RBI) released a draft circular on the arrangements with card networks for issue of debit, credit and prepaid cards. This circular required card issuers to provide customers with the option of switching between card networks, and prohibitted them from enterring into any agreements with card networks that restrain them from availing the services of other card networks.

In response to this, we shared our detailed feedback with RBI. Our feedback highlighted the following:

  • Consumer choice is primarily a function of benefits and services offered by a card, and not the card-network.
  • It is not possible to offer identical credit/debit cards on multiple networks, as agreements between issuing bank and card networks depend on commercial terms.
  • No evidence or research has been cited for a demand from the consumers for choice on card-networks.
  • Better consumer choice can be enabled by allowing all credit cards to be used for all use-cases.

Ultimately, we requested the RBI to not issue the draft circular as it does not solve any consumer choice issue and has the unintended effect of disincentivising investments in credit card market and reducing the incentives for product level innovations.

Our detailed submission is attached. For more information, kindly write to garima@nasscom.in.

 


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20230804-CardIssuance-nasscomsubm.pdf

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Garima Prakash
Manager, Public Policy and Government Affairs

Reach out to me for all things policy about e-commerce, international trade, export controls, start-ups and fintech

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