The RBI, in its latest Monetary Policy Committee meeting, has proposed to increase the limit for contactless card transactions from Rs 2,000 to Rs 5,000 from January 1, 2021.
Transactions on contactless cards are processed without any security code.
The Reserve Bank of India (RBI) in its latest Monetary Policy Committee meeting has proposed to increase the limit for contactless card transactions from Rs 2,000 to Rs 5,000 from January 1, 2021. However, before opting for a contactless card and using it, you should know its pros and cons.
As the transactions on contactless cards are processed without any security code, these are very easy and you don’t have to remember the PIN. At the time of Covid-19 pandemic, contactless payments are also safer than handing over a card and punching PIN.
“The RBI’s decision to increase the limit for contactless card transactions from Rs. 2,000 to Rs. 5,000 will give a much required boost to India’s digital payments industry. This hike in the limit will allow more people to transact conveniently and safely during this pandemic. This also gives businesses the opportunity to grow further by developing their point of sales terminals and encourage merchant acceptance – which is essential for the growth of the sector,” said Nitin Bhatnagar, Associate Director – India, PCI Security Standards Council, the organisation that was founded in 2006 by American Express, Discover, JCB International, MasterCard and Visa Inc and is involved in maintaining, evolving and promoting Payment Card Industry standards for the safety of cardholder data across the globe.
As transactions on contactless cards are done without any security code, there are risks that an unauthorised transaction may go through without your authentication. Moreover, incidents of online financial frauds have increased many fold with the increase in online transactions during the pandemic.
“At our recently concluded India Forum, several cybersecurity experts came together to discuss the risks attached to contactless payments as well. Cybercriminals have altered their tactics during this pandemic to exploit people through the Covid-19 messages. Cybercriminals will be looking to gaining access to databases of businesses for confidential payment card information. It is absolutely important that merchants, payment solution providers and vendors to look into the adoption of PCI Data Security Standards to help protect their customers payment data,” said Bhatnagar.
As transacts are done without any security code, it is very important to keep the contactless cards securely. If you lose a contactless card, there are high chances that you may lose some money without any authentication from your part. More the limit of transaction limit, the risk is more.
Apart from keeping your contactless card safe, you also need to ensure that transactions on such a card is done at reliable places to prevent data theft.
“Consumers should have confidence that a contactless transaction is as secure as any preceding form of payment. That is the responsibility of our industry and the business community to protect customers. Our role at the PCI SSC is to establish security baselines for technology vendors, solution providers and payment environments. That is why we list on our website those solutions in order to serve as a guide to merchants when selecting organisations to help them with their security needs,” said Troy Leach, Senior Vice President, Engagement Officer, PCI Security Standards Council.