RBI increases the limit for contactless cards

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RBI increases the limit for contactless cards

The Reserve Bank of India’s governor Shaktikanta Das on Friday at the time of publicizing the economic strategy announced that the limits for contactless card payments and e-mandates on cards and UPI have been increased from Rs 2000 to Rs 5000. To encourage people to use more and more digital methods securely, the Central Bank agreed to increase the limit on the will of the user. This will come into the scene from 1st January 2021.

 The CEO & Co-founder of Paisabazaar.com Naveen Kukreja said that the decision made on increasing the upper limit of the contactless card payments from Rs 2000 to Rs 5000 is going to be very liberal and in these pandemic times where social distancing and stopping cash payments would be of great help to the users. He also said that this shall further lead to the improvement of digital payments which would help the global economic system.

 These digital modes of transactions make everything safe and easier in comparison to cash payments. The new commands on impairment on contactless cards and telling the users to manage their limits have also led to the safety of the customers or users.

How does a contactless card work?

 A contactless card is an easier way to pay using credit and debit cards at any shop or mall. The limit now is Rs 2000 which will increase to Rs 5000 from January 2021. Regardless of whichever bank a person chooses the limit is the same for every bank. These cards have a chip and an antenna for recognizing the radio frequency from the terminal. The card and PIN are transported from the card to the terminal and the payment gets processed whenever a customer taps the card against a contactless-permitted terminal within 4 centimeters of the card reader.

 Moreover, if the transaction increases than the limit of Rs 5000 per swipe then while billing you may need to enter the PIN of your card. Below 5000 there’s no requirement of the PIN if there’s an option of “near field communication” enabled. If both are enabled then there will be no requirement for a PIN.

 Axis Bank’s head of cards and payments, Sanjeev Moghe said that the customers are secured during their transactions through these cards. When it is curved into the POS machine for the transactions below the limit of 2000 or 5000, then your card details and PIN might be seized unfairly.

Beware of theft

Now, if these cards are stolen then there’s a probability that the money may get stolen. The thief can easily go to any retail shop he may just swipe the card and if the transaction is below the limit of 2000 or 5000 there is no requirement of the PIN and the money gets subtracted.

One should not be even 0.01% careless while using these cards. Do not give your card to anyone who may end up doing multiple transactions without your approval as no PIN is required. 

Visa India & South Asia’s head of payments, Arvind Ronta said that these methods of transactions are no doubt an easier way to process the payments. But the cardholders should everyday check their account statements, keep their bank SMS active and stay alert, and should reach out to the bank if there are any distrustful transactions.

 

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