Regulator restricts banks from issuing contactless cards by default to users
MUMBAI: The Reserve Bank of India (RBI) on Wednesday restricted banks from issuing contactless credit and debit cards by default for all cardholders. The banking regulator said this facility, along with international transactions, will have to be enabled by the user.
RBI said that at the time of issue or re-issue, all cards (physical and virtual) shall be enabled for use only at contact-based points of usage like automated teller machines (ATMS) and point of sale (POS) devices within India.
It said that the volume and value of transactions made through cards have increased manifold and this decision is expected to improve user convenience and increase the security of card transactions.
The central bank said that for existing cards, the issuers may decide, based on their risk perception, whether to disable the card not present (domestic and international) transactions, card present (international) transactions and contactless transaction rights.
However, for existing cards which have never been used for online, international or in contactless transactions, will see such facilities disabled mandatorily.
The issuers, RBI said, will have to provide an option to switch on or off and set or modify transaction limits for all types of transactions—domestic and international.
The facility should be available round the clock through multiple channels—mobile application, internet banking, ATMS, Interactive Voice Response (IVR) and may also be offered at branches, it said.