Enabled for ATM & POS Transactions within India

Things to Know about RBI’s New Debit and Credit Card Mandate

Last week, RBI or the Reserve Bank of India, in an effort to make cashless transactions more secure and seamless for Indians, introduced a new set of rules which apply to both credit cards and debit cards. The new set of rules, which mainly focus on card-based transactions, are aimed at making sure that card frauds are less, while at the same time making transactions seamless and secure. The rules will be applicable from 1st October 2020, and thus, if you are a debit or credit card holder in India, this article is just right for you.

Understand the rules issued by the RBI and also their impact on your spending habits. Let’s get started.

Enabled for ATM & POS Transactions within India

The first and most important mandate by the RBI states that all new debit and credit cards in India, along with those that are being re-issued presently, will only be enabled for transactions at ATMs and POS or Point of Sales kiosks across India, on issuance. Earlier, as a cardholder, you could use most debit cards and credit cards both within India and outside its borders.

International Use on Request

Additionally, the mandate states that if any cardholder (both debit and credit) wants to use their card outside of India, they need to request their bank or NBFC to enable this service prior to use. Before this notification was issued, most debit cards and credit cards in India by default allowed usage both within India and internationally.

Contactless Transactions

The mandate states that existing cardholders in India will be issued a notification through which based on their risk perception, they can choose to enable their debit and credit cards for international transactions and also participate in contactless transactions.

Presently, several banks and NBFCs issue debit and credit cards which arrive with an in-built NFC or Near Field Communication chip which enables contactless payments. In this method, the cardholder doesn’t need to swipe or enter their card at an ATM or POS terminal for the transaction. However, going forward, the same will not be applicable by default, and both existing, as well as new cardholders, will have the option of opting in for this service.

Disabling Rarely Used Cards

The RBI notification dictates that if you already have a debit card or credit card that you have never used for an online payment or a contactless transaction, both these features will be disabled moving forward, and you will need to re-enable them by approaching your bank if you wish to use them in the future.

Opt-In Services & Spend Limits

One of the most interesting and intriguing aspects of the new mandate lies in the fact that both new as well as existing cardholders will now have the option to opt-in and opt-out of special services such as spend tracker, spend limits, online transactions, international transactions and contactless payments. Additionally, all cardholders will be extended a facility wherein they can switch on or off all transaction channels 24/7 either by using their phone (via internet banking), SMS banking, IVR as well as nearest ATMs as well as smart kiosks.

Along with this, new and existing cardholders will get the option to enable transaction limits on both their credit cards as well as debit cards.

Conclusion

The new mandate by the RBI is issued under Section 10(2) of the Payment and Settlement Systems Act, 2007 (Act 51 of 2007) and has been crafted in an effort to undermine the rising threat of cyber fraud, phishing, scamming and other financial risks. While the new mandate is definitely stringent, it is sure to encourage safer and more secure transactions for all cardholders across India.

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