New Delhi: Every customer has the option of portability if he/she is dissatisfied with any product or service of the company. This option is available in many services. You can port from SIM to insurance policy and now soon you will be able to port credit and debit cards as well.
RBI has proposed this by issuing a circular, which empowers debit, credit, and prepaid card users to choose their preferred card network. On this proposal, RBI has sought suggestions from banks and customers till 4 August 2023.
What is the circular in RBI’s draft?
As per the draft circular of RBI, card issuers will be prohibited from entering into any arrangement or agreement with card networks that prevents them from availing the services of other card networks. RBI said that ‘Financial Institutions should not issue credit cards, debit cards, and pre-paid cards for any particular card network. People should get the option to choose the network of their choice. The proposal challenges the existing rules where card network choices are pre-determined by agreements between issuers and networks.
As per the draft circular of RBI, card-issuing banks will provide their customers an option to choose from multiple card networks. This option can be exercised by the customer at the time of card issuance or any time thereafter.
What is card network portability?
Card network portability refers to the right of the consumer to transfer his card from one network to another. We can change our telecom service provider keeping the same phone number. Similarly, card network portability allows cardholders to retain their existing card balance and credit history while switching to a different payment network.
At present, there are 5 card network companies in India Visa, MasterCard, Rupay, American Express, and Diners Club. These companies have tie-ups with different financial institutions. Due to this, the customer does not get the option to choose the card network of his choice.
Presently there are 5 card network companies in India- Visa, MasterCard, Rupay, American Express, and Diners Club. They have tie-ups with different banks and financial institutions. Due to this, the customer does not get the option to choose the card network of his choice. But, after the implementation of card network portability, customers will start getting this right.
