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Localizing Credit Card Data: India Commands, is Anyone Listening?

Brian Riley by Brian Riley
October 15, 2018
in Analysts Coverage, Credit
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personal data credit card india

personal data credit card india

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When Mastercard and Visa both miss compliance dates, you can be certain there was a lack of clarity.  Bloomberg reports:.

  • Visa Inc. and Mastercard Inc. are among international payment companies set to miss a Monday deadline for certifying their compliance with data localization requirements set by India’s central bank, people familiar with the matter said.
  • The two credit card giants have requested an extension of the deadline and a relaxation of the rules, citing operational difficulties and security concerns, the people said, asking not to be named as the information is not public.

Some media are implying cards will not work after October 15, but that is unlikely.

  • The RBI will not relax the October 15 deadline for global financial technology (fintech) companies to comply with its data localisation norms in the public interest, according to sources. Among the affected companies are Facebook, Mastercard, Visa, American Express, PayPal, Amazon, Microsoft, says Reuters.
  • The financial tech companies in this mix have big credit card presence in this country. The central bank in April gave six months time to global payment companies to store transaction data of Indian customers within India. The RBI’s data localisation norms will kick in from Monday.
  • However, the US wants to prohibit data localisation to ensure free flow of information across borders.  “We want to have prohibitions on data localisation to ensure free flow of information, free flow of data across borders, disciplines around countries requiring companies to give up their source code, permanent ban on taxation or duties on digital transmissions,”Dennis Shea, Deputy US Trade Representative and US Ambassador to the WTO, told a Washington audience on Friday.

Data localization is a tough battle for card issuers to win.  It is expensive because of the data redundancy, staff and storage requirements.  China, the EU and Russia already require it so it is unlikely India will back off.  Sometimes, you can’t fight City Hall.

Overview by Brian Riley, Director, Credit Advisory Service at Mercator Advisory Group

Tags: Compliance and RegulationCredit CardIndiaMastcardPersonal DataVisa
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