RBI New rules to enhance security of Credit and Debit Cards – How it impacts you?

There has been consistent increase in the usage of credit and debit card transactions both for online and in-store purchases. This has also led to surge in frauds related to these card transactions. To counter these cards related fraud and to enhance customer control over transactions RBI has proposed following rules.

For New Cards or Reissued Cards

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.

The banks would provide facility to users for enabling card not present (domestic and international) transactions, card present (international) transactions and contactless transactions as their will. Card not present transactions means online or IVR related transactions.

For Existing Cards

Banks 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.

Facility to Control Transactions to Customers

All banks would provide 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.

Prepaid Cards

The above provisions are not mandatory for prepaid gift cards and those used at mass transit systems.

All the above rules would come in effect from March 16, 2020.

I think this is a great move. In most cases the transactions are enabled for online/offline transactions both in India and International by default. However, there are relatively very few people who need to transact internationally. For majority of people who transact internationally do occasionally.

Most fraud transactions related to cards happen overseas as they can easily by-pass two factor authentications of PIN. There were some banks offering above facility partially. With RBI pushing for these new rules, it will create more awareness and people must use it to prevent fraud.