Mastercard is once again able to operate freely in India after the country lifted the business ban imposed on the payments giant one year ago.
Besides Mastercard, the ban introduced by the Reserve Bank of India (RBI) was also validated for American Express and Diners Club, barring them from issuing new cards – debit, credit, or prepaid ones – due to being suspected of compliance failings with the local data storage rules. The restrictions were enforced without any clear details around their duration.
Interestingly, Mastercard is currently the only one out of the three enterprises that has had the ban against it lifted, with American Express and Diners Club continue to face obstacles in the region, yet are still able to service existing customers.
In a statement, the RBI released: “In view of the satisfactory compliance demonstrated by Mastercard Asia / Pacific Pte. Ltd. with the Reserve Bank of India (RBI) circular dated April 6, 2018 on Storage of Payment System Data, the restrictions imposed, vide order dated July 14, 2021, on on-boarding of new domestic customers have been lifted with immediate effect.”
A deeper dive into the local data storage rules will reveal that they make it mandatory for payments companies operating in India to store the data from all Indian transactions in the country itself. The rules were introduced back in 2018 and since have been opposed by Visa, Mastercard, and even the White House, with the argument that they grant the regulator an “unfettered supervisory access”.
Mastercard has also issued a statement, saying: “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.
“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. 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.
“India is an important market for us, both in terms of the innovation created here and the value we deliver to our customers and partners. We take great pride in being able to contribute to the government’s vision of a Digital India and will continue to invest in the country’s future with the same passion and dedication as we always have.”
Prior to the ban, Mastercard owned an approximate 33% market share in the country. The company has outlined a clear strategy to grow in the world’s second largest market, investing in it more than $2bn over the last decade.