DEBIT and Credit cardholders, who have never used their cards for online transactions, would soon not be able to avail this facility, as per a new RBI direction. The Reserve Bank of India has directed all banks and card issuers to disable online payment services of all debit and credit cards that have never been used for online/contactless transactions. In a statement dated 15 January 2020, the central bank told banks and card issuers: “Existing cards which have never been used for online (card not present) / international/contactless transactions shall be mandatorily disabled for this purpose.”
On Wednesday, the RBI issued several new directions to enhance security of card-based transactions. The central bank said that for existing cards, the issuers may decide on whether to disable the card not present (domestic and international) transactions, card present (international) transactions and contactless transaction rights based on their risk perceptions.
According to the new RBI directions, at the time of issue/re-issue, all cards should be enabled for use only at contact-based points like ATMs and PoS devices within India. “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,” RBI said.
Card issuers will have to provide cardholders a facility for enabling card not present (domestic and international), transactions, card present (international) transactions and contactless transactions.
Card issuers will also have to provide the following three facilities:
- 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 should be provided 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 of the card issuers.
- Prompt information on any change in the status of the card. RBI said that that Card issuers will have to provide “alerts/information/status, etc., through SMS / e-mail, as and when there is any change in status of the card.”
The new provisions will be mandatory for prepaid gift cards and those used as mass transit systems.