New Credit Card Rules Considered by FATF For Cross-Border Credit Card Transactions

The global financial monitor, the Financial Action Task Force (FATF), is considering new disclosure norms for cross-border online transactions, including credit cards. These proposed changes could also involve real-time tracking of the transactions, affecting both international and domestic transactions. Currently, credit card transactions only need the cardholder’s name and country of origin. However, the new standards would expand this to include more detailed real-time tracking and bring most payment aggregators under the disclosure norms.

If adopted, the new standards would require legal and procedural changes across countries. Industry players, including VISA and MasterCard, are being consulted, with a focus on guaranteeing that compliance does not compromise the ease of doing business or the speed of transactions. The proposed changes are in line with the FATF’s objective of making cross-border payments faster, cheaper, more transparent, and inclusive while remaining safe and secure.

India will host a consultation discussion on these changes in Mumbai in April. The Reserve Bank of India is also actively engaging with industry stakeholders on this issue. Sources indicate that the RBI is advocating for a balance between compliance and the concerns of the industry, emphasizing the importance of not impeding the fintech industry.

It is important to note that the FATF’s Travel Rule guidelines already require financial institutions and virtual asset service providers to share data about cross-border transactions. Once FATF formally adopts the revised reporting norms, all member countries will implement them within the next 2-3 years. It is worth highlighting that India has been rated highly in the FATF mutual evaluation process, receiving the highest rating in 37 out of 40 parameters. The FATF has recognized that the country meets the global money-laundering requirements at a high technical level.

Bottom Line

The proposed new credit card rules for cross-border transactions being considered by the FATF aim to make payments faster, cheaper, and more transparent while ensuring safety and security. These changes will impact the global financial industry, and it’s important for stakeholders to collaborate in finding a balance between compliance and industry concerns. As the industry evolves, it’s important to prioritize efficient growth while sticking to the new standards. With the upcoming consultation in India, regulatory bodies and industry players are actively engaging in discussions to navigate the changes effectively for the benefit of all parties involved.