Starting September 6, 2024, you’ll be able to select your preferred credit card network—RuPay, Visa, or MasterCard—when applying for a new card or renewing your existing one. Previously, banks decided the network for you, but now you have the freedom to choose based on your needs and spending habits.
Why Did RBI Introduce This Change?
To promote competition, the Reserve Bank of India (RBI) issued guidelines in March, preventing banks from having exclusive agreements with card networks. This gives customers more control and the ability to choose the network that best suits them. While Visa and MasterCard have dominated the market, RuPay is growing fast, and the RBI’s move is part of a broader strategy to enhance the digital payments landscape in India.
However, banks like American Express, which operate their own networks, are exempt from this rule.
How Does It Work?
Banks like Bank of Baroda and YES Bank have already implemented this change. When applying for a new credit card, simply select your preferred network—either online or on the application form.
Benefits of Choosing Your Network
1. Wider Acceptance: Some networks are accepted in more regions or countries, ensuring smooth transactions.
2. Flexibility: You can choose based on the value or perks you find most beneficial.
3. Network-Specific Perks: Some networks offer exclusive benefits like lounge access or special memberships (e.g., MasterCard’s World Elite perks vs. Visa Infinite).
Industry Insights
Experts believe this will spark competition among card networks, benefiting consumers with more offers and perks. RuPay is already gaining popularity, especially with its integration with UPI and new features like the RuPay Lounge at Delhi’s T3.
Challenges & Pricing Impact
Smaller banks may find it challenging to manage multiple networks, and it could take time for customers to become aware of these changes. However, card fees (annual or renewal) won’t be affected by network choice. Fees for using networks vary, with RuPay being cheaper than Visa and MasterCard, but banks are unlikely to reduce fees for RuPay cardholders.
Overall, this change brings more flexibility, competition, and benefits to cardholders in India’s evolving payments ecosystem.