The Indian banking sector has come to terms with American Express issuing new cards in the country. AmEx was prohibited from doing so for some time. However, the company now fully complies with domestic data storage rules and is allowed to resume its business.
A Big Win For AmEx In India
Similar to other financial service providers, AmEx could not perform day-to-day operations across India for some time. That is the result of the Indian government forcing financial service providers to store data in the country. AmEx received a ban on issuing new payment cards and onboarding new customers in May 2021. It took until August 2022 for the company to get all of its affairs in order.
The decision to force companies to store full end-to-end transaction details in systems only in India did not go over well. Various US firms, including the US government, lobbied against the idea. However, the Indian government has not budged on its stance, and service providers have no choice but to comply with these requirements.
AmEx India interim CEO and COO Sanjay Khanna adds:
“India is a key strategic market for American Express and today’s decision is the result of our significant local investments in technology, infrastructure, and resources.”
After achieving “satisfactory compliance”, American Express can begin issuing new cards and onboard additional customers in India. A similar ban against Mastercard was lifted in June 2022, confirming the struggles these companies face in complying with these rules. It remains a very weird rule and creates a dangerous precedent for other countries to follow.