It has also asked the card issuers to provide an option to their eligible customers to pick any one among the multiple card networks. The central bank added that the option may be exercised by customers either at the time of issue or at any subsequent time.

“Card issuers and card networks shall ensure to adhere to the above requirements in existing agreements at the time of amendment or renewal thereof, and fresh agreements executed from the date of this circular”, the RBI draft circular added.

The rule is a challenge to the existing practice of an agreement between the card issuers and the networks, thus paving way for card network portability. Amit Gupta, managing director, SAG Infotech, explains this term.

According to him, Credit card network portability refers to the ability of consumers to transfer their credit card accounts from one network to another.

Gupta adds,”Just like we can switch our mobile service providers while keeping the same phone number, credit card network portability allows cardholders to maintain their existing credit card accounts, balances, and credit history while switching to a different payment network”.

How does it help customers?

Amit Gupta added that it will empower customers to pick the card network that suits their needs, whether it is dependent on factors including rewards programmes, acceptance or customer service.

He added that it will enhance competition among credit card networks and will give customers more control over their financial choices. However, Gupta added that not all credit card issuers or networks may back portability and there might be specific terms and conditions with the transfer process.

Therefore, individuals considering credit card network portability should carefully research and evaluate their options before making any decisions”, he added.