Payment and settlement systems are the backbone of any economy. The last decade has witnessed substantial developments in this area of activity across the country. Reserve Bank of India (RBI), under powers from the Payment and Settlement Systems Act, 2007, has endeavored to ensure that India has ‘state-of-the-art’ payment and settlement systems that are not just safe and secure, but are also efficient, fast and affordable. Following table shows the glimpse of the manifold increase in the volume and value of transactions made through Cards as well as some of the other Retail Payment Systems in the country:

Considering above aspects, RBI through its circular on Enhancing Security on Card Transactions dated January 15, 2020 has issued certain measures to improve user convenience and increase the security of card transactions.

Key features

1. New cards
• To be enabled only for use at ATMs and POS at the time of issuance
• Issuers to provide cardholders a facility for enabling the card for use through other modes i.e. online, contactless and for international transactions {hereinafter referred to as ‘Other Usage’}
• Facility to be provided for switch on/off for all usage types (i.e. ATM. PoS, online, contactless, international) and set/modify transaction limits to be provided on 24x7 basis across all channels (Mobile, Internet, ATMs, IVRs, Branches)
• Alerts through SMS/e-mail to be sent as and when there is a change in status in terms of transaction limit or switch on/off of the card usage
2. Existing cards
• Issuers based on their risk perception may decide on disabling the cards for Other Usage
• Cards never transacted for Other Usage to be mandatorily disabled
3. Provisions not mandatory for prepaid gift cards and cards used at mass transit systems.
• Provisions effective from October 01, 2020.