The Reserve Bank of India has proposed new rules to improve the safety features of debit cards and credit cards. While issuing and reissuing the debit and credit cards, banks must assure that all the debit cards and credit cards are permitted only for domestic purchases at ATMs and point of sale terminals, RBI said in an announcement.
Card issuers have also been urged to enable cardholders to adjust transaction limits within the overall card limit for all kinds of activities -domestic and international at PoS, ATMs, online purchases and contactless purchases.
RBI has advised banks and other card issuers to allow cards only for use at contact-based points i.e. ATMs and Pos devices within India at the point of delivery of the cards. This means that when a card is assigned it will, by default, only be applied to physically swipe at a PoS or an ATM. It would not be allowed to use online or for contact-less activities.
For existing cards, banks will use their own preference whether to allow cards for internet practice or not. But those cards that have never been practiced for online purchases, or by any means of ‘card not present’, such means will have to be disabled automatically. In other words, cards never used for internet transactions cannot be used for online transactions anymore.
When a bank assigns a debit or credit card, it also provides internet banking credentials. However, those not pleased with such transactions are obvious victims of call-center scams, where the fraudster calls and asks data of the card, one-time password (OTP), to siphon off cash.
In a system, the RBI is hoping that people who already do online purchasing know the value of CVV numbers, or OTPs and do not share with them over a phone call. They can proceed with such a facility. But people not conscious of internet-related scams will not have to worry about such scams happening with them as that very office won’t be available by default anymore.
The RBI also directed banks to provide all cardholders the ease to “switch on/off and set/change transaction boundaries for all types of activities —domestic and worldwide — at PoS/ATMs/online transactions/contactless purchases, etc.”
This facility should be made accessible on a 24×7 basis through various channels — mobile use/internet banking/ATMs/interactive voice reply — and can be submitted through branches as well.
According to RBI information, the volume and amount of transactions made through cards have risen manifold over the years. To enhance user convenience and improve the safety of card transactions, it has been determined as under:
- a) At the point of issue /re-issue, all cards (physical and virtual) shall be permitted for use only at contact-based points of practice within India. Issuers shall give cardholders a means for enabling card, not present (domestic and foreign) businesses, card-present (international) activities and contactless purchases.
- b) For existing cards, issuers may take a decision, based on their danger perception, whether to disable the card not present activities, card-present transactions, and contactless purchase rights. Existing cards that have never been practiced for online/foreign/contactless transaction rights. Existing cards that have never been practiced for online/international/contactless purchases shall be mandatorily disabled for this goal.