Mastercard banned from issuing debit, credit or prepaid cards in India

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ndia’s central bank has blocked global payments giant Mastercard from adding new customers in an escalation of a long-standing dispute about local data storage rules.

The Reserve Bank of India (RBI) found Mastercard to be in violation of its April 2018 circular that directed all payments data to be stored exclusively in India, allowing the regulator “unfettered supervisory access” to transaction details. Global payments service providers Mastercard, Visa and American Express have lobbied against data localisation, citing increased costs.

“Notwithstanding (the) lapse of considerable time and adequate opportunities being given, the entity (Mastercard) has been found to be non-compliant with the directions of Storage Payment System Data,” the RBI said in a notification.

Mastercard will be indefinitely banned from issuing debit, credit or prepaid cards to customers in India from 22 July. Mastercard did not immediately respond to media queries. American Express and Diners Club International were also indefinitely barred by the RBI from issuing new cards to customers from May for the same reasons.

Last year, Mastercard accounted for 33% of all card payments in India, according to London-based payments analysis business PPRO.

Global payments card companies have faced increasing competition from India’s United Payments Interface transactions, which offer cardless and cashless payment options using phone numbers and QR codes. A record 2.8bn UPI transactions worth some INR5.5trn ($73.8bn) took place in June.