RuPay, Visa, or MasterCard? Starting September 6, You Can Choose Your Credit Card Network
RuPay, Visa, or MasterCard? Starting September 6, You Can Choose Your Credit Card Network
With the RBI’s new guidelines, credit cardholders will have the flexibility to select their preferred card network, fostering competition among networks and increasing customer benefits.
Starting September 6, 2024, credit cardholders in India will have the freedom to choose their preferred card network—whether it’s Mastercard, Visa, or RuPay—when applying for a new card or renewing an existing one. This change is driven by the Reserve Bank of India’s (RBI) latest guidelines, which aim to promote competition in the digital payments landscape, enhance customer choice, and potentially improve benefits and rewards for users.
Traditionally, when you applied for a debit or credit card, the choice of network was determined by your bank, which typically had exclusive arrangements with one or more card networks. For example, Visa and Mastercard have long dominated the market, but RuPay has emerged as a strong competitor in recent years. Customers had no say in which network their card would use, which limited access to network-specific benefits.
What’s Changing?
According to the RBI’s March 6 circular, banks and non-bank card issuers can no longer enter into exclusive agreements with card networks. This means customers can now select their preferred network, either at the time of card issuance or when renewing a card.
Certain card issuers, like Bank of Baroda (BOBCARD) and YES Bank, have already adopted this change and are prompting customers to choose their preferred network when signing up for new credit cards. Some banks allow existing customers to switch networks during card renewal simply by contacting customer service.
Potential Benefits for Customers
The RBI’s guidelines aim to foster a competitive environment among card networks, which could lead to a range of benefits, such as:
- Better Rewards and Perks: Networks may introduce more exclusive offers, like cashback, discounts, or memberships, to attract customers.
- Greater Convenience: Certain networks may have better acceptance rates in specific regions or countries, ensuring smoother transaction experiences for users.
- UPI Integration: With the growing popularity of UPI payments in India, RuPay cards may become a preferred option for many customers due to their seamless UPI integration.
For instance, if you select the MasterCard network with IndusInd Bank’s Pioneer Heritage Credit Card, you’ll get complimentary ITC Culinaire membership, a perk that’s not available with the Visa variant.
What Does It Mean for Card Networks?
The increased competition among networks could lead to greater customer retention efforts, forcing networks to enhance their offers and innovate to attract users. Although American Express is exempt from these guidelines due to its proprietary network, Visa, Mastercard, and RuPay are expected to intensify their competition.
Ravindra Rai, Whole-Time Director of BOBCARD Ltd., emphasized that choosing your network adds a layer of convenience and acceptance for customers based on their travel habits or spending preferences. Similarly, Ankur Mittal, co-founder of Card Insider, pointed out that many cardholders wanted RuPay credit cards due to UPI’s rising popularity but were restricted by network choices. These new guidelines give customers greater control and flexibility to match their financial habits with the right network.
The RBI’s new guidelines aim to empower credit cardholders by giving them the ability to choose their network. Whether it’s for better rewards, global acceptance, or seamless UPI payments, customers now have the power to select the card network that aligns with their preferences, making digital transactions more customized and rewarding.
