With an aim to promote ‘tap and pay’ electronic payments, the Reserve Bank of India (RBI) has finally allowed customers to transact with contactless card upto INR 2000 without punching a separate PIN for authentication.
It means that now additional factor authentication is not required upto INR 2000 per transaction and a customer can now just wave the card before the PoS machines to complete the transaction.
Besides, the RBI has said that banks should give customers a choice to set a limit lower than INR 2000 per transaction and issuing bank will be responsible for authorising the contactless payment based on such card-based limits.
The move is likely to speed up acceptance of ‘tap and pay’ electronic payments at retail outlets, in transport services and for toll payments. The ‘tap and pay’ refers to the use of near-field communication (NFC) technology, enabling users to make payments by waving or tapping the card near the contactless reader instead of swiping it.
The RBI has advised banks to explain to customers the NFC technology, its use, risks and also the maximum liability devolving on the customer, and also to put in place a robust mechanism to report of loss or stealing of cards.
In addition, it has asked banks to conduct velocity checks to decide on how many such small value transactions could be allowed in a day or a week or a month.