In a shocking move the Reserve Bank of India announced on Wednesday restrictions on MasterCard Asia Pacific Private Limited. RBI imposed restrictions and banned MasterCard from India for an indefinite time period.
But what a MasterCard really is?
MasterCard is a company which is driven by technology in the business of global payments which is used to connect business owners, financial bodies, agencies, consumers etc to engage in electronic payment of cash rather than using the offline methods like check and cash. It has the authorization to run a card network in India which is derived from the Payment and Settlement Act System Act. It is widely used because according to the data released by the PPRO, London based payment agency, 30 percent of the payments in India were done by a MasterCard.
The decision came in the company’s light not complying with the data storage and security rules of the RBI. It will come into effect from July 22. “Notwithstanding a lapse of considerable time and adequate opportunity is being given, the entity has been noncompliant with the directions on Storage of Payment System Data”, the regulator mentioned in a notification.
There is an obvious dilemma too many consumers as well who use a MasterCard. Turns out, the defecation said that the people who have been using MasterCard debit or credit cards in the country should not be worried because it will not affect them. The existing customers of Master Card will not be affected by these orders and they can use all the services and the benefits of it with no changes.
RBI, in 2018 said that the data related to payments must be stored and processed only in India by the service providers and should not be used outside. Before this notification many other technological giants like WhatsApp and Google also stored their data outside India but, then RBI asked them that if they were to do it, they would report compliance and submit an audit report for the same but still some foreign companies are yet to follow the data guidelines by RBI.
Similarly, RBI also took strong measures against American Express banking corporation and diners club International limited because they were allowed in the data storage of the payment system.
MasterCard, in response to a query from CNN business, added that they were not happy with the decision of the RBI but they would still continue to work and resolve any of the concerns or troubles they were facing because they have worked closely with the central banks over the past three years.
Data privacy concerns are their all over the world. There has been many cases where the data of the consumers have been leaked and it has led to a lot of loss, a lot of tension and dilemma in the country, society and to the consumers, so the decision of the RBI is very much appreciated.
Many people expect some losses because of this because various banks like HDFC and many others use MasterCard but in the long term it is a very good decision considering the data privacy norms and the situation which is going on regarding it.