RBI has recently banned Mastercard in India due to non-compliance with some data storage rules. The situation has seriously affected the country’s financial sector.
Earlier in April, similar action was taken against American Express but it bore fewer consequences. Mastercard accounted for a third of roughly 100 debit cards in India and 75 credit card variants used its network. RBI has notified that after July 22 such cards will not be issued in India as they failed to store Indian payments data locally as required by a foreign card network.
This comes as an obstacle for banks in India like RBL, YES, and Citibank who offers their card facilities with the help of this US firm. As digital payments were on the rise, more people had resorted to debit and credit cards. The transition to Visa cards will be delayed and will make an effect on bank fees and income generated from cards business.
Mastercard is also said to lose a lot. It had recently invested in India and India is one of its key markets. The research and technology centers of the network will also shut down resulting in the unemployment of 4000 people. This workforce is their second-largest, after the US.
