Limitations on the number of plastic cards: An expert's insights on the objectives and potential impacts.

The Central Bank of Uzbekistan has imposed restrictions on the number of bank cards that can be owned by a single individual to combat fraud. According to the regulator, this issue was not previously regulated at the legislative level, leading to instances where individuals possessed hundreds of cards. Under the new temporary regulations, individuals are now allowed to have up to five cards at one bank, with a total card limit, including virtual cards, not exceeding 20. These restrictions do not apply to foreign currency cards.

However, questions arise regarding the rationale behind such limitations. Such measures could negatively impact many economic, social, and business systems.

Payment cards play a crucial role in the economy by stimulating consumption and supporting users through loans, loyalty programs, and bonus systems. However, restrictions on the issuance of bank cards may complicate payment options, especially in rural areas, and increase the burden on cash circulation infrastructure.

Social and Economic Consequences

The limitations on the number of cards may adversely affect small and medium-sized enterprises, particularly in the service sector, which risks losing clients accustomed to cashless transactions. This would lead to reduced revenues, increased costs associated with cash transactions, and diminished competitiveness. Furthermore, financial services and fintech companies that are developing innovations in cashless payments will also face challenges.

The effectiveness of such restrictions in combating fraud remains questionable. Cash is also susceptible to theft, and limiting the number of cards may only increase costs related to security, insurance, and management of additional funds. Moreover, restrictions on card circulation could negatively impact the development of e-business and online payments, which are vital components of the economy's digitalization.

International Experience

In most countries around the world, there are virtually no restrictions on the issuance and use of cards. In European Union countries, banks allow clients to issue multiple debit cards if they belong to different payment systems (Visa, Mastercard) or have different types (for example, standard and premium cards). In the United States, customers can also hold multiple debit cards at one bank, especially if they are linked to different accounts.

In Asian countries like China and India, banks permit the opening of several debit cards. In Russia, banks allow the issuance of multiple cards for a single account, including cards for relatives or additional users.

Constitutional Rights and Limitations

According to Article 21 of the Constitution of the Republic of Uzbekistan, the rights and freedoms of an individual may only be restricted based on law and solely for the purpose of protecting the constitutional order, public morality, the rights and freedoms of others, or ensuring public safety. Any restrictions must be proportional, justified, and have a clear and convincing connection to the stated objective.

The right to manage one's property is also fundamental. Under Article 66 of the Constitution of the Republic of Uzbekistan, an owner has the right to manage their property at their discretion. This includes the use of financial instruments such as payment cards. Additionally, Article 65 of the Constitution emphasizes the principle of equality in economic freedom. Limiting the number of cards could violate this principle.

Need to Reassess Temporary Restrictions on the Issuance of Payment Cards

The restriction on the issuance of payment cards, adopted without considering public opinion and the positions of cardholders, needs to be revoked and the approach reassessed. A payment card is merely a means for conducting transactions, and limiting their number does not address the key issues within the financial system. On the contrary, such measures create unnecessary barriers for the public and businesses, complicating the accessibility and convenience of payments.

Instead, regulators should focus on promoting cashless transactions, enhancing their accessibility, and building public trust in the financial system. Simplifying the conditions for using cashless payments and creating a favorable environment for their expansion would make a more significant contribution to the stability and security of the financial sector.

The main idea is the necessity to revoke the temporary order. As noted in the conclusion, these measures will not hinder the activities of fraudsters, who will simply adapt to the new conditions.

Limiting the Number of Payment Cards Does Not Solve the Fraud Problem, as fraudulent schemes can adapt to new conditions, and temporary measures risk becoming long-term and ineffective. Instead of introducing artificial restrictions, the card issuance and circulation system should be improved, along with increasing the financial literacy of the population.

A significant step in combating fraud could be conducting large-scale information campaigns aimed at raising citizens' awareness of financial risks and methods to protect their funds. Only a comprehensive approach can genuinely enhance the security of payment transactions.

Akhror Mahmudov