RBI Governor Shaktikanta Das said contactless card limit is increased from Rs 2,000 to Rs 5,000
The Reserve Bank of India (RBI) Governor Shaktikanta Das announced today that the central bank has increased the limit for contactless card payments from Rs 2,000 to Rs 5,000 per transaction. The revised limit will come into effect from January 1, 2021 and it will be at the discretion of the user. The announcement was made by the RBI Governor during the bi-monthly policy review in an online briefing. The decision to extend the contactless card transaction limit is likely to help users make secure and safe payments amid the COVID-19 pandemic. (Also Read: RTGS Payment System To Be Available On 24X7 Basis Soon )
“In order to expand the adoption of digital payments in a safe and secure manner, it is proposed to enhance, at the discretion of the user, the limits for contactless card transactions and e-mandates for recurring transactions through cards (and UPI) from 2,000 to 5,000 from January 1, 2021,” said RBI Governor Shaktikanta Das.
“The recent instructions on disablement of contactless feature on cards and empowering customers to control the limits on their cards have also brought in added safety for users. To further the adoption of digital payments in a safe and secure manner, it is proposed to enhance, at the discretion of the user, the limits for contactless card transactions and e-mandates for recurring transactions through cards (and UPI) from 2,000 to 5,000 from January 1, 2021. Operational instructions will be issued separately,” said the RBI in a statement.
What are contactless cards?
Contactless cards, either credit or debit, have an additional function that allows users to make payments without any physical contact. These cards use near field communications (NFC) technology, enabling customers to make payments at payment terminals without swiping the card anywhere.
The transaction will be complete by just placing the card over the reading machine. Entering the pin is also not required. Currently, the limit on such transactions is capped at Rs 2,000.
“The RBI’s decision to increase the limit from Rs. 2000 to Rs. 5000 without entering a PIN on contactless transactions through NFC cards is a welcome move. We have in recent months seen a marked increase in contactless transaction on our network. This is because of the fact that the entire transaction is contactless with no one but the cardholder touching the card and also very importantly the ease of use,” said Mr. Deepak Chandnani, Managing Director, Worldline South Asia and Middle East.
He further added that NFC transactions follow safety protocols as specified by RBI and Payment Schemes and cardholders can be assured that their transactions are being conducted in a secure manner.