The nation is going digital and imbibing the changes, the Reserve Bank of India (RBI) had issued several new guidelines to be able to make the digital payments more secure. These new rules will come into effect from today i.e. October 1.
These new rules aim to improve the user convenience and also increase the security of card transactions, The RBI officials said that the volume and value of transactions made through cards have increased manifold. So, in order to increase the security of card transactions, new rules are issued. The directions are issued under Section 10(2) of the Payment and Settlement Systems Act, 2007 (Act 51 of 2007).
Here are 10 things you need to know about the new debit card, credit card rules:
- Banks are asked to allow only domestic card transactions at ATMs and PoS terminals in India at the time of issuance/re-issuance of the card.
- Customers will have to separately set up services on their card for international transactions, online transactions, card-not-present transactions and contactless transactions.
- RBI has asked all banks, card issuing companies to disable online payment for all debit, credit cards that have never been used for online or for contactless transactions in India or abroad.
- For existing debit, credit 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/international/contactless transactions shall be mandatorily disabled for this purpose.
- People will now also be able to register for preferences such as opt-in or opt-out services and other services for online transactions, international transactions and contactless transactions.
- Issuers shall be provided to all cardholders facility to 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.
- Users will have 24×7 access to switch ON/OFF or change all transaction limits via all available channels such as mobile application/internet banking/ATMs/Interactive Voice Response (IVR).
- Many banks have also been issuing cards based on near field communication (NFC) technology. A merchant doesn’t need to swipe such cards or insert them in the point of sale terminal. These are also known as contactless cards. Cardholders will now also get the option to enable or disable the NFC feature.
- The new regulations apply to debit and credit card only. Prepaid gift cards or those used at mass transit systems (such as metro) are not covered under this.
RBI asserted that these new rules are issued under Section 10 (2) of the Payment and Settlement Systems Act, 2007 (Act 51 of 2007).