India Blocks Mastercard from Adding Customers Due to Data Breach

[ad_1]

NEW DELHI β€” India on Wednesday banned Mastercard from adding new customers to the country over allegations that it violated the country’s data storage laws, a blow to the company in a market it has invested heavily in expansion.

The Reserve Bank of India said Mastercard failed to comply with its 2018 mandate to only store data on local transactions in India despite “significant time and ample opportunity”. In the statement made by the central bank, it was stated that the ban on issuing cards to new customers will come into effect on July 22.

Mastercard said in a statement it was “disappointed” by the government’s restriction, but said the move would not affect its operations. He added that he is working closely with authorities to “ensure we comply with the requirements” of the 2018 directive. A company representative declined to provide details about the bank’s decision.

“Mastercard is fully committed to our legal and regulatory obligations in the markets in which we operate,” the statement said. “We will continue to work with them and provide any additional details needed to address their concerns.”

American Express and Diners Club faced similar restrictions this spring, but they are significantly smaller players in the Indian market.

According to a study conducted by PPRO, a London-based payment startup, in 2020, Mastercard accounted for 33 percent of card payments in India, ranking second after Visa with a 45 percent share. In 2019, Mastercard announced it had invested $1 billion over five years to expand its presence in India, adding to the $1 billion it had already invested from 2014 to 2019.

As part of India’s effort to better protect its data, the demand for end-to-end transaction details to be stored only in India has caused complications for international payment processors. But India has resisted lobbying by financial companies, claiming that installing local data processing significantly increases costs and could set a precedent for other countries to do the same, potentially affecting fraud monitoring.

“I don’t think it’s a case of them saying we won’t do it – there may be a bit of delay and they may be in the process of doing it,” said AP Hota, formerly India’s leading online payments analyst. National Payment Corporation made statements about the latest restriction on Mastercard.

Mr Hota said the 50 largest banks in India have relationships with Mastercard as well as Visa and Rupay, a local payment processor. If the ban was short, Mastercard could control the damage, but in a market where Mastercard is heavily invested, the backlash from the expanded restrictions could be harsh.

β€œIt will have a significant impact,” he said. “Banks that have substantial agreements with Mastercard will need to consider alternatives.”

[ad_2]

Source link

Leave a Reply

Your email address will not be published. Required fields are marked *