Do you make (or want to make) online, international or contactless payments with your debit or credit card? Card holders in India will need to pay heed to new RBI rules regarding their cards and making online and contactless payments from tomorrow.
As per an RBI notification dated January 15, debit and credit cards that have never been used for online or contactless payments will have such functionality disabled from March 16 as part of a slew of security measures by the RBI to stop card fraud.
For new cards (physical or virtual) issued after this date, such features will be disabled by default and owners will have to enable them through their banks.
“At the time of issue / re-issue, all cards (physical and virtual) shall be enabled for use only at contact based points of usage [viz. ATMs and Point of Sale (PoS) devices] within India. Issuers shall provide cardholders a facility for enabling card not present (domestic and international) transactions, card present (international) transactions and contactless transactions, as per the process outlined in para 1,” the notification read.
Banks may also tale a decision as to whether they disable such features for existing cardholders. But, they must mandatorily disable them for cards that have not yet been utilised for online, contactless or international payments.
The idea is to reduce the likelihood of card fraud on unsuspecting cardholders by enabling functionality only for those who have opted for it. This will result in new cardholders from March 16 having to select options with their bank for the features they want.
To put it simply, if your bank issues you a new credit or debit card after March 16, it will only work for domestic card transactions at ATMs or PoS terminals. If you want it to do more, you will have to enable such functionality through your banking app, internet banking, or by calling the bank or visiting its branch.
The notification mandated that the cardholders be informed by SMS of any changes to their card status, and that they be provided 24/7 facility to make modifications through the bank through multiple channels like via a mobile app, internet banking, ATMs, interactive voice response (IVR). Such features “may also be offered at branches/offices” the notification said.
In addition, issuers must provide all cardholders with the ability to “switch on/off and set/modify transaction limits (within the overall card limit, if any, set by the issuer) for all types of transactions”—domestic and international, PoS, ATMs, online, contactless, etc.
The circular added that such provisions will not be mandatory for prepaid gift cards or those used in mass transit systems.
In the notification, RBI said the move would "improve user convenience and increase the security of card transactions."
According to the 2016 Global Consumer Fraud Report, India was ranked among the top five countries globally that were most vulnerable to credit card fraud.
