The Reserve Bank of India has posed restrictions on Mastercard Asia/Pacific Pte. Ltd. (Mastercard) from onboarding new domestic customers onto its network from July 22nd 2021.
Mastercard is a popular Payment System Operator authorized to operate a Card Network in the country under the PSS Act.
The reason behind taking this action is for violating RBI’s norms on the storage of payment systems data. The supervisory action has been taken in the exercise of powers vested in RBI under Section 17 of the Payment and Settlement Systems Act, 2007 (PSS Act), the RBI stated.
Through RBI circular on Storage of Payment System Data dated April 6, 2018, all system providers were directed to ensure that “within a period of six months the entire data (full end-to-end transaction details/information collected/carried/processed as part of the message/payment instruction) relating to payment systems operated by them is stored in a system only in India. They were also required to report compliance to RBI and submit a Board-approved System Audit Report conducted by a CERT-In empaneled auditor within the timelines specified therein.”
In one of its statement, Central bank said that “Notwithstanding the lapse of considerable time and adequate opportunities being given, the entity has been found to be non-compliant with the directions on Storage of Payment System Data”. Mastercard shall advise all card-issuing banks and non-banks to conform to these directions, the statement added.
But there’s a news of relief, as this order will not impact the existing customers of Mastercard.
Before the restrictions on Mastercard, just 3 months prior, RBI restrained American Express and Diners Club International, owned by Discover Financial Services, from issuing new cards due to similar violations.