Banks Can Now Disable Debit Or Credit Cards For Online Transactions. Know What It Means To You

All new debits and credit cards, including those which are reissued, can only be used for domestic transactions at ATMs and point of sale (PoS) terminals: RBI

In order to secure banking transactions and curb misuse of cards, the central bank has issued new guidelines that have been effective starting October. Hence, it is important to note the key changes going ahead to ensure that your transactions are smooth. Also Read:  Relief For Taxpayers! CBDT Extends Belated, Revised ITR Filing Deadline For AY 2019-20 | Check Details

What are the major changes?

From this month onward, all the new debit and credit cards issued by banks will only be enabled for domestic transactions at ATMs and point of sale (PoS) terminals. The Reserve Bank of India directed all banks and other card-issuing companies to disable online payment services of all debit or credit cards which have never used in any kind of digital payment both within the country and or abroad. "At the time of issue/re-issue, all cards (physical and virtual) shall be enabled for use only at contact based points of usage within India," RBI said.

Also note that banks reserves the right to deactivate current cards and reissue them based on risk perception. Again if you have not used the card for online transaction, international transactions and contactless transactions before, the bank will have an option to disable these options.

What it means to you?

Basically, if you want to use the card for online transactions, you will now have to approach the bank. As a cardholders you need to connect with bank to enable any other facilities including online transactions, international transactions and contactless transactions for debit and credit cards. These services won't be available by default any more.

Also, if you want to use the card outside India, you have to ask the bank to enable international transactions. So far, most of the banks issue cards which by default could be used anywhere in the world. You will now be able to register for preferences such as opt-in or opt-out services, spend limits and other services for online transactions, international transactions and contactless transactions.

What happens to existing cardholders?

For existing debit, credit cards, issuers may take a decision, based on their risk perception, whether to disable the card not present (domestic and international) transactions, card present (international) transactions and contactless transaction rights.