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The Reserve Bank of India (RBI) has lifted a one-year ban on Mastercard onboarding new card customers in the country, as local card scheme RuPay sets its sights on Europe.
In July last year, the RBI ordered Mastercard to stop onboarding all new credit, debit and prepaid card customers, after it accused the firm of violating data storage rules.
The decision was based on new rules introduced by an RBI circular in April 2018, under which all payment system providers were given six months to ensure that end-to-end transaction details were stored exclusively in India.
Mastercard, alongside Visa, American Express, PayPal, Amazon and the US government, was among the institutions that lobbied against the rule when it was first introduced.
However, the RBI said it has removed the restrictions on Mastercard, after seeing "satisfactory compliance" with the new rules.
"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,” Mastercard said in a statement.
"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."
Payments data nationalism
In 2018, the RBI said the new rules were designed to improve data monitoring within the payments industry for safety and security purposes.
“In recent times, there has been considerable growth in the payment ecosystem in the country,” the RBI said in a statement.
“Such systems are also highly technology dependent, which necessitate adoption of safety and security measures, which are best in class, on a continuous basis."
The RBI observed that “not all” system providers store payments data in India, and sought to make this practice illegal through a circular issued under the Payment and Settlement Systems Act 2007.
“In order to ensure better monitoring, it is important to have unfettered supervisory access to data stored with these system providers as also with their service providers / intermediaries / third-party vendors and other entities in the payment ecosystem,” the RBI said.
The move meant that all data relating to payment systems that operate in India must be stored in the country, including non-transactional data such as information collected as part of a payment message or payment instruction.
The only exception to the rule was for transactions that passed through a foreign jurisdiction.
In such cases, details relating to the foreign leg of the transaction could be stored in the foreign country.
Finally, system providers were required to submit a system audit report (SAR) following implementation of the new data storage model.
RuPay Goes Global
While India attempts to safeguard its payments system data from foreign influence, it is also seeing success in growing international acceptance of RuPay, its domestic card scheme.
On Thursday (June 16), a government minister said that the international arm of the National Payments Corporation of India (NCPI) has signed a memorandum of understanding (MoU) with French firm Lyra Network.
The partnership is expected to lead to the acceptance of RuPay cards and services that use India’s instant payment service, Unified Payments Interface (UPI), in France.
"Considering that India is doing 5.5 billion UPI transactions per month, this strategic partnership will definitely prove to be a game-changer in the digital payments ecosystem," said Ashwini Vaishnaw, minister for railways, communications, electronics and IT.
“Today's MoU with France is a big step towards the world,” he added.
With the MoU between NPCI International and Lyra Network, Indian tourists will be able to make UPI and RuPay payments when travelling to France.
The deal means that France will join a growing list of countries now accepting India’s domestic payment schemes, including Singapore, UAE, Bhutan and Nepal.
Last month, VIXIO reported that Bharat Interface for Money (BHIM), a mobile payments app that uses UPI, is now live in the UAE.
The launch was made possible through a collaboration between NCPI International and NEOPAY, a unified merchant acquiring and consumer paytech subsidiary of the UAE’s Mashreq Bank.
NPCI International is currently in talks to extend UPI and RuPay services to the US, West Asia and other European countries.
