In a major boost to promote the use of contactless card transactions, India’s apex bank — The Reserve Bank of India — has decided to waive off the second level of authentication on card transactions. This move will enable customers to carry out transactions up to Rs. 2000 without PIN authentication by using the fast-emerging ‘tap and pay’ technology.
Welcoming the move, Arundhati Bhattacharya, Chairman and Managing Director, SBI said, “This will make life easier for consumers shopping online by enabling them to skip the process of typing an additional password.”
Contactless cards use near-field communication technology as the base, making them more secure than the traditional methods as one does not need to swipe or enter the new-generation cards in a machine. This also keeps allows you to keep the card at your person at all times, considerably reducing loss or misuse.
Contactless cards have been launched by private lenders such as ICICI and HDFC. The latest to offer the contactless card service is State Bank of India, which launched its array of cards on 14th May. (Read: State Bank of India Launches Contactless Debit and Credit Card)
SBI, however, wants the RBI to increase the limit to Rs 5,000.
“We have asked the RBI to increase the limit of maximum value per transaction to Rs 5,000 to enable more small-value transactions using contactless method,” said Bhattacharya elaborating further.
It does not imply that the merchants can force the customer to make a contactless payment. Even if the amount is below Rs 2000, a customer can make a payment using his PIN. Hence, contact payment using chip-based cards powered by PIN is possible for all payments, irrespective of the amount.