Which debit/credit cards' online transaction facility will be disabled from March 16?

New Delhi: RBI Debit, Credit card rule: An RBI rule will kick in from March 16, which will automatically disable all those debit and credit cards that have never been used for online transactions. In a notification issued by the Reserve Bank of India on January 15, the apex bank had announced the move aimed at enhancing security for digital transactions.

RBI issued new rules for debit and credit cards to improve convenience and security. The online or contactless transactions facility will be mandatorily disabled on all those debit or credit card on March 16 that have never been used such transactions.

In a statement dated 15 January 2020, the RBI told banks and card issuers: "For existing 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. Existing cards which have never been used for online (card not present) /international /contactless transactions shall be mandatorily disabled for this purpose. The directions are issued under Section 10(2) of the Payment and Settlement Systems Act, 2007."

Cardholders now have only time till March 16 to use such cards for online, contactless transactions to stop them being disabled permanently for these transactions.

RBI has also asked banks to allow only domestic card transactions at ATMs and PoS terminals in India at the time of issuance / re-issuance of the card.

“At the time of issue/re-issue, all cards (physical and virtual) shall be enabled for use only at contact-based points of usage [viz. ATMs and Point of Sale (PoS) devices] within India,” RBI said.

"...facility to switch on/off and set/modify transaction limits (within the overall card limit, if any, set by the issuer) for all types of transactions -- domestic and international, at PoS/ATMs/ online transactions/contactless transactions" should be provided on a 24x7 basis through multiple channels, RBI added.

The RBI has also asked the card issuers to send SMS or email to cardholders if there's any change in the card's status.

In short, after March 16th, any debit or credit card can be blocked for online services. 

Once blocked, the cardholder will need to reapply for a cashless payment feature on the debit/credit card. This blocking of debit/credit cards will begin after March 16th.

If a customer wishes to use these facilities, then they will have to apply to the bank for the same. The new provisions will be mandatory for prepaid gift cards and those used as mass transit systems.