Hurry up before your debit and credit cards stops working online. Reserve Bank of India (RBI) has notified that from August 1, security for online transactions via credit or debit cards will be enhanced. Cardholders now will have to register their cards under ?verified by Visa/MasterCard 3D Secure programme?.
?As per the new notification, customers will have to register their cards with the bank or service provider (Visa or Master card) to get a second password which will enable them to make online transactions,? explained a RBI official.
This is the first time for security reasons RBI has made it mandatory for all the banks to adhere to the guidelines in the stipulated time given.
The RBI has asked all the banks to put the system in place of providing additional authentication or validation based on information not visible on the credit or debit cards for all online transactions with effect from 1 August, 2009.
In case of non-adherence to the directives, the banks will have to pay penalties prescribed under the Payment and Settlement Systems Act 2007 said the RBI release.
Talking to FE, an official from ICICI Bank explained that the bank will work on making changes in the systems, before the RBI scheduled deadline of 1 August.
?We have no changes in the system as of now. The customer has an option to skip the page and move on to make the payment by feeding in other necessary details. However, there are some customers who are confused and hence are not been able to make the transaction,? he said.
He also added that on making the necessary changes, like introducing a second password for the customer, the latter will be informed by statements, e-mails or SMSes, by the bank. Of late, customers have been complaining of not being able to carry out the transaction as they say the website asks for a second password which is not delivered to them.
However, the RBI official explained that the ?second? password will be made available by the bank or the service provider to the customer or may be a customer generated password.
Parag Rao, head of product, portfolio and service delivery, credit cards with HDFC Bank noted that the central bank is seeing to it that the second layer of authentication will help in reducing the number of online banking frauds happening in the banking system.
?We had started using the second layer of authentication for customers, way before the RBI notification came into force. Here, there is a customer generated password created by the customer, which helps the transaction goes smoothly, without any hassles to secure the transaction. In India, with the use of all kinds of robust measures, we expect the number of frauds to slide,? he added.
While banks have already begun streamlining their databases, online travel portals like Cleartrip and Yatra have been busy informing their customers about the same.
Travel makes a chunk of credit and debit card usage online, among others.
Indicating that there will be some hiccups to start off with and affect business, Tarique Khatri, vice president business development, Cleartrip, said, ?We had started educating our customers over a month back through emails, SMSs and website campaigns.? He added that the customers for the time being can go in for netbanking and IVR transaction options for booking online.
As per the new RBI notification, while booking through credit and debit cards the customers in the begining will be directed to respective card issuer?s website during the payment gateway, asking for a new password, following which the customer will be redirected to the original website.