Secure credit and debit card usage: How RBI's new directives help customers

Using your credit and debit cards is about to get a bit safer. On January 15, 2020, the Reserve Bank of India (RBI) issued a notification asking all the banks to enhance the security features of debit and credit card transactions. Some common queries regarding this transition are addressed here.

Q: What are the new security features added for domestic and international transactions?

A: Effective March 16, 2020, banks need to have features that limit the usage of debit and credit cards in India and when customers travel abroad. Consumers can now modify transaction limits within the overall card limit for all types of domestic and international transactions, be they at point of sale (PoS) terminals, ATMs, online, or contactless. This feature will be available for transactions carried out with the physical, virtual and contactless cards.

Often, consumers have concerns relating to the misuse of cards. However, they can now protect the misuse on cards by switching off the use for online transactions, international usage, etc. Also, consumers were worried of overspending with multiple debit and credit cards. They can restrict the usage by setting the limit for usage on all cards. By setting the transaction limit, the consumer can now limit the use to certain expenses and monitor the usage of the card periodically. Also, other features make the cards more secure for consumers.

Q: My card allows international transaction, but I’m not flying abroad anytime soon. Can I turn off my international spend feature temporarily to avoid mis-use?

A: Yes, you can. And there are other features as well that you can similarly switch on and off. For instance, if you hold a credit card and use it only for online shopping on e-commerce websites such as Amazon and Flipkart, it will make sense to switch off other transaction modes such as PoS, ATMs and contactless transactions on that card. Similarly, you can switch your international usage when it’s time for you to travel abroad. The RBI’s directives are steps towards curbing card frauds and unauthorised transactions. At the same time, it gives more control to the consumers in deciding several aspects of card usage.

Banks need to provide the facility to switch on and off various features on your cards, on a 24 x 7 basis through multiple channels –mobile application, internet banking, automated teller machine (the bank’s own ATM) and interactive voice response (IVR). A consumer can also avail of this facility by visiting the bank’s branch.

Q: Can I still continue to use my existing credit and debit cards?

A: The RBI has instructed banks to disable features in existing debit and credit cards that have never been used for online or contactless transactions. It means, if you have been using your cards only at ATMs and point of sale terminals, only those features will be enabled. This decision from central bank is to protect rural and new to banking consumers, senior citizens, etc. from fraudulent transactions wherein they may not be using all transaction facilities available.

Q: I have just applied for a new card. Will it now come with new features?

A: From March 16, banks will issue new cards or re-issue existing ones on expiry. These would enable only transactions via physical swipes in point-of-sale terminals and ATMs. Everything else, from online transactions on e-commerce websites to contactless transactions, would have to be manually enabled by the consumer. The likes of HDFC Bank, ICICI Bank, Axis Bank, etc. already have some of these safety and control features for their consumers.