India Slaps Ban on Mastercard, Threatening Missed Growth

India's central bank has ordered Mastercard to stop adding new customers for failing to comply with the country's data storage rules, escalating a dispute between Indian authorities and U.S. financial services groups over the control of customer data, the Financial Times reported. The Reserve Bank of India said that Mastercard had not complied with rules introduced in 2018 that bar payment companies from transferring customer data overseas. The regulations, which were fiercely resisted by U.S. payment companies, required all financial data to be stored exclusively in India. The central bank said Mastercard's failure to meet the requirements came "notwithstanding lapse of considerable time and adequate opportunities being given." Its order comes into effect July 22 and does not affect existing customers. It imposed similar restrictions on American Express in April. The bans could be costly for U.S. payment groups, which risk missing out on the roaring growth of non-cash payments as India's government pushes to expand access to financial services among its population of 1.4 billion. India's data localization policies, which are part of a global trend by governments to expand oversight of their citizens' data, have already proved a source of trade tension with the U.S. The U.S. trade representative under then-President Donald Trump criticized India's data storage rules as "discriminatory and trade-distortive." Mastercard said that it was "fully committed to our legal and regulatory obligations in the markets we operate in" and to resolving the RBI's concerns. Read more.