India requires banks to let cardholders opt in to contactless payments

Card issuers in India are to be required to ship all new cards to customers with contactless functionality switched off by default — and also provide cardholders with a range of easy ways to toggle their card’s contactless support on or off.

Reserve Bank of India

The new requirement will come into effect from 16 March 2020 and also covers both card not present and international transactions.

“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,” the Reserve Bank of India (RBI) says.

Issuers will be required to provide cardholders with a range of ways to switch on card not present, international card present and contactless functionality, including via “mobile application/internet banking/ATMs/Interactive Voice Response (IVR)”. The facility “may also be offered at branches/offices”

Cardholders must also be provided with a 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 including “domestic and international, at PoS/ATMs/online transactions/contactless transactions, etc”.

In addition, issuers must provide “alerts/information/status, etc, through SMS/email, as and when there is any change in status of the card”.

“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,” the central bank adds.

“Existing cards which have never been used for online (card not present)/international/contactless transactions shall be mandatorily disabled for this purpose.”

“The provisions of this circular are not mandatory for prepaid gift cards and those used at mass transit systems,” RBI adds.

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