RBI allows Rs 5000 Credit Card, UPI contactless payment in New Year 2021; know how to do it safely

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Updated: Dec 08, 2020 4:39 PM

Contactless Payment: While the increase in the contactless payment limit is a welcome move, the RBI decision may trigger security concerns among customers. They will need to be more cautious to make safe contactless payments.

contactless paymentNever share UPI ID or pin with anyone and keep the card securely after the transaction as the stolen the card doesn’t need a PIN for transaction. Image source: Pixabay

Safe Contactless Payment: The Reserve Bank of India has decided to increase the limits for contactless credit card payment and e-mandates for recurring transactions through cards and UPI from Rs 2000 to Rs 5000 from January 1, 2021. The RBI decision has been welcomed by experts. According to Dilip Asbe, MD & CEO, NPCI, the RBI announcement will boost the average value of transactions and push the country ahead on the path of becoming a less-cash economy. 

Asbe told FE Online that the RBI decision will allow cardholders to make secured contactless transactions of up to Rs. 5000. It will also give a boost to users of recently launched UPI AutoPay functionality to execute hassle-free recurring payments like utility bills, investments, two-wheeler EMIs, consumer durable EMIs etc. 

RBI’s move of increasing the limit to Rs.5,000 is expected to unlock the true potential of contactless payments. According to Manish Patel, Founder and CEO, Mswipe, the RBI decision will allow SMEs to accept digital payments for larger ticket size transactions. “Be it a monthly kirana bill, spa service or a course fee, the spectrum of products and service that can be paid through contactless payments will definitely expand with this new move,” he said.

While the increase in the contactless payment limit is a welcome move, the RBI decision may trigger safety concerns among customers. They will need to be more cautious to make safe contactless payments. But, how? 

Alert for first-time users

Venkat Krishnapur, Vice-President of Engineering and Managing Director, McAfee India, told FE Online that by eliminating the need for exchanging cash or giving the card and keying in a PIN code on a machine at the point of sale, contactless payments offer a quick and convenient way to pay. However, he warned that with the increase in the first time users looking to use alternative methods to traditional transaction methods like cash or card, this may also open up new avenues for cybercrime. Because first-time users aren’t well acquainted with the potential security hazards of using contactless payment methods. 

Krishnapur suggested that the users should treat their mobile phones, online wallets and financial applications with the same amount of security and caution as they would their bank accounts. “This is all the more important if you have set up an NFC-enabled (Near-Field Communication) cards or mobile wallet on your device.”

He further suggested having strong passwords. “If your phone isn’t protected by a strong password, fingerprint or another form of identity verification, anyone who has access to your phone will be able to go shopping with your mobile wallet/UPI apps.”

“No matter how tempting and convenient it may be, never use the same PIN to unlock your smartphone as the one which authenticates contactless payments,” he added. 

Key to safe contactless payments

Contactless payments are convenient, but like any technology, it comes with both – security and data privacy risks. 

Experts suggest that awareness and vigilance on part of users is key to staying safe while transacting in an increasingly ‘contactless’ world. “Since you don’t need a PIN, a lost credit/debit card or a stolen mobile phone potentially gives miscreants easy access to your bank account. So take the time to set up or strengthen security measures on your device to prevent fraud if your phone is lost or stolen,” said the McAfee official. 

Damon Madden, Principal Fraud Analyst, ACI Worldwide told FE Online that making the switch to contactless payments amid COVID-19 seems like a natural way for most people to protect themselves and others while out shopping. He said that while the contactless payments are safe, consumers should bear in mind the following best practices for using contactless payments:

  •  Always keep the card in a safe custody 
  • Do not hand over your card to unknown people (as a customer you do have the right to raise a chargeback if it’s an unsolicited transaction)
  • Use NFC or MST based applications on mobile handsets. With this mechanism, a fingerprint scan (biometric sign) or passcode is needed to initiate payment
  • If the card is lost, immediately call the bank, report the loss, and block the card 
  • Keep contact details updated with the bank to get instant alerts of any transaction performed.

Manish Patel of Mswipe suggested not to share UPI ID or pin with anyone and keep the card securely after the transaction as the stolen the card doesn’t need a PIN for transaction. 

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