The Reserve Bank of India has told Mastercard to stop onboarding all new credit, debit and prepaid card customers in the country, accusing the firm of violating data storage rules.
In a statement, the central bank says the ban on on-boarding new cardholders begins on 22 July and is indefinite. The order does not affect existing Mastercard users.
Says the RBI: "Notwithstanding lapse of considerable time and adequate opportunities being given, the entity [Mastercard] has been found to be non-compliant with the directions on Storage of Payment System Data".
Under data storage rules from 2018, all payment system providers were given six months to ensure that full end-to-end transaction details were stored in systems only in India. The rule change was designed to "ensure better monitoring" of data.
Mastercard - along with Visa, American Express, PayPal, Amazon and the US government - lobbied against the rule when it was first introduced.
The RBI took similar action against American Express and Diners Club in April. However, Mastercard has a far larger presence in the vast and fast-growing Indian market.
Just last month, Mastercard looked to deepen its presence in the country, making an undisclosed equity investment in Instamojo, a provider of e-commerce technology to micro businesses and gig workers.