Visa Says India’s Data Rules Will Hurt Ability To Compete With Local Rivals
Visa Inc. said the central bank’s move asking payments companies to store data locally will increase costs and affect its ability to compete with domestic rivals.
The growing “nationalistic priorities” will have cost implications on Visa’s business, the global payments giant said in its annual report. Such requirements, it said, can impact the company’s ability to efficiently use its global network, affecting its strategy.
Its rival Mastercard, too, in its earnings call last month said the data localisation will make business expensive. Both, however, agreed to adhere to new norms.
The Reserve Bank in April asked all payment system operators to store transaction data within India to ensure access for supervisory and monitoring purposes. The regulator gave them six months to comply.
In addition, Visa expects the banking regulator to drive down the fee merchants pay banks and processing companies. That, it said, could negatively affect the economics of transactions.
Visa said it’s facing a similar situation in China, Indonesia, Russia, Thailand and Vietnam where governments are giving preference to domestic payments companies. That’s done by imposing local ownership rules, data localisation or mandating that payments are processed within that country, Visa said.