Card issuers have also been asked to allow card holders to modify transaction limits within the overall card limit for all types of transactions -domestic and international at PoS, ATMs, online transactions and contactless transactions.
RBI has directed banks and other card issuers to enable cards only for use at contact based points i.e. ATMs and Point of Sale (Pos) devices within India at the time of issue of the cards. This means that when a card is issued it will, by default, only be usable to physically swipe at a PoS or at a ATM. It would not be enabled for use online or for contact-less transactions.
The card would have to be enabled for these type of transactions by the user himself or herself. Currently, when a card is issued it can immediately be used for card present (swiping) transactions, online and contact-less transactions.
As per the RBI directive, card holder will have to be given the facility to switch on and off the other facilities on their cards after it is issued to them. These directions on enhancing security of card transactions will come into effect from March 16, 2020, as per the RBI notification.
Enhancing security of card transactions
According to RBI notification, the volume and value of transactions made through cards have increased manifold over the years. To improve user convenience and increase the security of card transactions, it has been decided as under:
a) 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.
b) For existing cards, issuers may take a decision, based on their risk perception, whether to disable the card not present (domestic and international) transactions, card present (international) transactions and contactless transaction rights. Existing cards which have never been used for online (card not present) / international / contactless transactions shall be mandatorily disabled for this purpose.
c) Additionally, the issuers shall provide to all cardholders:
- Facility 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, at PoS /ATMs /online transactions /contactless transactions, etc.;
- The above facility on a 24×7 basis through multiple channels – mobile application /internet banking / ATMs /Interactive Voice Response (IVR); this may also be offered at branches /offices
- Alerts /information /status, etc., through SMS /e-mail, as and when there is any change in status of the card
Points to note
The provisions of this circular are not mandatory for prepaid gift cards and those used at mass transit systems.
Issuers and card networks may give wide publicity to the provisions of this circular.