Contactless card transaction limit to be increased to Rs 5,000 from Jan 1, 2021

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Updated: Dec 04, 2020 4:06 PM

NFC transactions follow safety protocols as specified by RBI and Payment Schemes and cardholders can be assured that their transactions are being conducted in a secure manner

NFC enabled cards, contactless card, PIN, transactions, RBI, limit, UPI,In recent months there has been a marked increase in contactless transactions.

If you have become comfortable with the contactless card transactions, here is a piece of good news for you. In order to expand the adoption of digital payments in a safe and secure manner, the RBI has proposed to enhance the limit for contactless card transactions from Rs 2,000 to Rs 5,000 from January 1, 2021. In addition, the transaction limit on e-mandates for recurring transactions through cards and UPI has been proposed to be increased from Rs 2,000 to Rs 5,000 from January 1, 2021. These increase in limits will, however, be at the discretion of the user.

“The RBI’s decision to increase the limit from Rs. 2000 to Rs. 5000 without entering a PIN on contactless transactions through NFC cards is a welcome move. We have in recent months seen a marked increase in a contactless transaction on our network,” says Deepak Chandnani, Managing Director, Worldline South Asia and Middle East.

On NFC enabled cards, there is no requirement to enter PIN while making transactions at merchant establishments. “This is because of the fact that the entire transaction is contactless with no one but the cardholder touching the card and also very importantly the ease of use. NFC transactions follow safety protocols as specified by RBI and Payment Schemes and cardholders can be assured that their transactions are being conducted in a secure manner,” adds Deepak Chandnani.

A cardholder desirous of opting for e-mandate facility on card shall undertake a one-time registration process, with additional factor authentication (AFA) validation by the issuer. An e-mandate on card for recurring transactions shall be registered only after successful AFA validation, in addition to the normal process required by the issuer. This facility will now also be available for UPI users.

“The announcement will help RuPay cardholders to make secured contactless transactions of up to Rs. 5000 on the go thereby facilitating them with hassle free transaction experience. Similarly, this will be a major boost to the users of recently launched UPI AutoPay functionality for the customers to execute their high ticket recurring payments like utility bills, investments, two-wheeler EMIs, consumer durable EMIs etc. seamlessly,” says Dilip Asbe, MD&CEO, National Payments Corporation of India (NPCI)

Currently, the limit for e-mandate based recurring transactions without AFA is Rs 2,000 per transaction and is proposed to be increased to Rs 5,000. Transactions above this cap are also subject to AFA. As a user, one can set a spending limit on the card and even switch-off the card usage for better security.

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