Cardholders can enable, disable cards for online use: RBI

If you are a cardholder, you will get to exercise greater control over your credit and debit cards. Find out how.

Cardholders can enable, disable cards for online use: RBI

The Reserve Bank of India (RBI) has directed banks to enable card users to make changes to their cards on their own. These changes include enabling/disabling types of use of the card and making changes in the transaction limits for various types of transactions. The RBI has also directed the banks to provide only ATM and Point of Sale (POS) facility on the cards at the time of their issue. The card user will have to enable other uses like online and contactless transaction on their own. The cardholder will also have the facility of switching on or off any facility available on the card after it is issued to them. 

The RBI notification observed that the number and volume of the transactions had increased significantly over the years and these steps are, therefore, necessary to maintain security and improve customer experience. Apart from the above directives, the card issuers will also have to decide the fate of their existing cards. Based on the risk perception, issuers will decide whether domestic, international, contactless transactions etc. on cards will be disabled or not. 

Thus, as per this directive, cardholders will be able to switch on or switch off and modify the transaction limits for various card transactions like POS, ATM, online and contactless for both international as well as domestic usage. The ability to do so will be available across platforms like mobile application, internet banking, ATMs, Interactive Voice Response and physical offices and branches. The cardholder will be notified through SMS and email on every change made in the card. 

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What are the new changes that a cardholder can make?

The cardholder will now be able to set transaction limits for transaction types. For example, a credit card holder can set a cash transaction limit at ATMs of up to Rs 10,000. However, these transaction limits will be within the overall card limit set by the issuer.

The cardholder will also have to enable card not present transactions (domestic and international), card-present transactions (international) and contactless transactions. Only contact-based usage (POS and ATM) will be activated at the time of issuance.
 
How has card frauds featured in India in recent years?

In 2018-19, there have been 1866 cases of credit card and internet banking related frauds, amounting to Rs 71 crores, as disclosed in RBI’s annual report. Internationally, in October 2019, card details of 1.3 million customers were hacked by international hackers. This was leaked on to the darknet and compromised the financial secrecy of a large customer base. In view of these events, RBI and the National Payments Corporation of India were prompted to take additional security measures.

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How will it improve the security around cards?

This decision will allow the cardholder to manage the limit and usage of card not present transactions, where most card related frauds happen. With more control in their hands, cardholders will be able to switch off transactions promptly according to their will. This will bring more security in case of thefts and misuse of cards. Existing cards not yet used online will be disabled unless the cardholder chooses to alter it. This will rule out future frauds on such cards.

Another method of maintaining security around cards is opting for the contactless credit card option. Have a look at what they are and how they work.
 

 

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