on Jul 16, 2021)Mumbai: RBI’s restrictions on Mastercard will hit credit card issuance by a host of entities. and Yes Bank and entities like , Maruti, Flipkart, Tata, Vistara and BookMyShow — which issue co-branded cards — will need to look for alternatives.
RBL Bank has informed the stock exchanges that approximately 1 lakh new credit card issuances could be hit. The bank is in talks with Visa, but issuing cards under the new network would take 8-10 weeks. RBL Bank has 30 lakh credit cards and is the fifth-largest issuer with a 5% market share. A large chunk of its cards is issued by
through a partnership agreement.
A Yes Bank spokesperson said that for new credit card issuances, the bank is evaluating a migration to other platforms for a ‘seamless transition’. It added that its debit cards are also available on Visa and RuPay platforms and new issuances will not be hit.
Bankers say besides the technical integration, a new partnership with Visa will require banks to negotiate all the incentives and offers afresh.
According to a research by ICICI Securities, the restrictions will help improve market share for respective unaffected incumbents. “The issuance of co-branded cards with Mastercard will also stop due to the RBI restriction. If a particular Mastercard co-branded credit card has a high contribution to the overall mix of a credit card player, it will have a higher impact on the issuer’s business growth,” the report said.
