Soon, all payments through cards can be contact-free
New Delhi: Soon, you can make contact-less payment through credit/debit card at merchant stores for any amount as the Reserve Bank of India has given its nod to payment networks — Visa, Mastercard and NPCI — to allow tap-and-go functionality on card payments for all purchases at retail stores and shopping centres with a view to make such transactions safer and contact-free during and after the coronavirus pandemic, the Economic Times mentioned in a report.
Now, banks and payment service providers need to make some upgrade in their system following which customers can avoid swiping their credit and debit cards at shops enabled with contactless point-of-sale devices, even for purchases exceeding the current limit of Rs 2,000, the business daily mentioned.
Tap-and-go card payments for purchases above Rs 2,000 will require two-factor authentication and customers must enter a PIN to process the transaction, the publication mentioned.
“Card-present (CP) transactions with EMV chip and PIN cards may be processed in contactless mode, irrespective of the transaction value,” the business daily quoted RBI as saying in an email to the country’s three card networks. “However, the transactions with values over Rs 2,000 shall be authenticated by PIN.”
It may be noted that tap-and-go transactions are enabled by radio frequency identification technology and don’t require physical contact with a payment terminal.
Customers can still transact through traditional means by swiping their cards where the option is available, the central bank reiterated in the letter.
“It is now incumbent on banks and payment participants to implement the changes in infrastructure,” the publication quoted an official aware of the matter as saying. “The system changes needed are not too complicated. The card issuers, merchant acquirers and consumers need to be readied. It should be a matter of three months if all goes well.”
Worth mentioning here is that contactless card transactions are getting more traction nowadays because of the Covid outbreak. Mastercard CEO Ajay Banga told reporters at a press briefing on Wednesday that contact-less card transactions rose by 40% in the first quarter of the year. Meanwhile, Visa has been piloting projects to bring the technology to smartphone devices in India and abroad, the publication mentioned.