Debit, credit cards to be disabled for online transactions if not used before

The Reserve Bank of India today has introduced new guidelines in a bid to enhance the security features of debit cards and credit cards. While issuing and reissuing the debit and credit cards, the lenders should ensure that all the debit cards and credit cards are enabled only for domestic transactions at ATMs and point of sale (PoS) terminals, RBI said in a notification.

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“At the time of issue/re-issue, all cards (physical and virtual) shall be enabled for use only at contact-based points of usage within India,” RBI said.

If customers want to make use of their cards for online transaction, international transactions and contactless transactions, they will have to separately apply for these services.

If any individual has never used his or her cards for online transaction, international transactions and contactless transactions prior to this announcement, their card will be disabled for these services, said the regulator.

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Customers will now have to apply to the bank for availing these services. For existing card users, banks can also make a decision whether to disable the card for domestic and international transactions, online and contactless transaction rights based on their risk insight.

“Existing cards which have never been used for online (card not present) / international/contactless transactions shall be mandatorily disabled for this purpose,” the central bank said.

The lenders must ensure that cardholders can ‘switch on’ or ‘switch off’ their online transaction, international transactions and contactless transactions at ATMs and PoS terminals.

One can also set their own limit for all kind of transactions at ATMs. Customers should also be provided with an option of opting in these services via 24X7 mobile applications, net banking. Banks should inform the customers pertaining to any change in the status of the card through SMS or email alerts.

These rules are not applicable to prepaid gift cards and those cards used at mass transit system, the central bank added. This new rule for debit and credit cards will be effective from March 16.