Your credit and debit card soon would be more secure. The banking regulator has tightened card security by introducing new measures.
The directions that Reserve Bank of India (RBI) has given to banks could also mean that some transactions on your credit and debit card may not be possible unless you ask banks to enable them. Read on to find out more.
From March 16 this year, all new cards, including those which are reissued, would only work in India. If customers want to use their cards outside India, they would need to request their banks for the facility. Before the notification, most banks issued cards that, by default, could be used anywhere in the world.
RBI has also asked banks to do away with some more transactions that were enabled on cards by default. Within India, the new cards will work only at the point of sale (PoS) terminals and ATMs. The cardholder would need to approach the bank to enable all other transactions, including online purchases and payments.
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 the point of sale terminal. The merchant takes the card close to the PoS terminal, and the transaction takes place. These are also known as contactless cards. RBI has said that such an option should not be enabled by default. A customer has to request for this facility, too.
These measures will make the cards more secure and curb their misuse. Many times, scammers get hold of cards and use it for online transactions at international websites. As international payment gateways are involved, it gets difficult to trace them. Also, many seniors don’t use their cards online. By asking banks to restrict certain transactions, unless a customer specifically asks for it, card misuse would come down.
The central bank has left it to the discretion of issuers on how they want to deal with the existing cards. Banks can deactivate current cards and reissue them based on risk perception. If you have an international debit or credit card that you have never used for either online transaction or outside the country, expect banks to disable these options.
A cardholder will also now have tighter control over her cards. From March 16, cardholders will get the facility to set their transaction limits online. Say, you want daily transaction limit on your card to be restricted to ₹2,000, or you want each transaction should not be more than ₹1,000. RBI has asked banks to provide such facilities to customers on mobile banking, on bank’s apps, on internet banking, at ATMs, and as many places possible.
A cardholder would also be able to switch her cards on and off whenever required. This is equivalent to blocking and unblocking the card based on your needs. When you are going to an ATM for withdrawal, you would be able to unblock the card, use it, and then block it again. If you lose the card or its stolen, it cannot be misused as it would be switched off or blocked for use.
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.