Federal Bank, Yes Bank in talks with Visa and RuPay for onboarding new credit card users
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With the Reserve Bank of India barring Mastercard from onboarding new users, Federal Bank and Yes Bank are in discussions with Visa and RuPay to restart issuances of credit cards over the next two to three months.
Both the private sector lenders had exclusive tie-ups with Mastercard. They have stopped onboarding of new credit card customers following the embargo by the Reserve Bank of India (RBI) on Mastercard from acquiring new customers.
Shalini Warrier, Executive Director at Federal Bank said the lender is likely to restart issuance of credit cards within two months.
“There are two other franchises – Visa and RuPay. We have started the process with both of them and we will be back in action within the next two months. We will continue with existing to bank customers and at some point move to new to bank customers,” she said.
The bank had launched credit cards for existing to bank customers in a digital format in June this year and had onboarded 20,000 cards to date.
Yes Bank’s credit card ambitions
Yes Bank Managing Director and CEO Prashant Kumar also said the process to onboard RuPay and Visa for initiating issuance has started.
“The bank has already signed an agreement with RuPay and will sign an agreement with Visa within next week,” he said, adding that they expect issuance to restart in 90 to 120 days.
Yes Bank in recent months has been fairly ambitious in its credit card business. Kumar said over the next three months, the bank would not be in a position to issue 75,000 to 1 lakh cards
“There will be no impact due to the bar on Mastercard on existing 9,87,000 credit cards in force. It will not impact profitability of the bank in the short term and we will make up on the lost acquisition momentum in the current fiscal year,” he said, adding that the news of the embargo on Mastercard came as a surprise to the bank.
Earlier, RBL Bank, which too had an exclusive tie up with Mastercard, entered into an agreement with Visa on July 14 to issue credit cards enabled on the Visa payment network.
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