RBI Governor Shaktikanta Das said the contactless card limit was increased from Rs 2,000 to Rs 5,000.
The Governor of the Reserve Bank of India (RBI), 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 take effect on January 1, 2021 and 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 information session. The decision to extend the contactless card transaction limit is likely to help users make safe and secure payments amid the COVID-19 pandemic. (Also read: The RTGS payment system will be available soon 24 hours a day, 7 days a week)
“In order to expand the adoption of secure digital payments, it is proposed to improve, at the user’s discretion, the limits for contactless card transactions and electronic mandates for recurring transactions through cards (and UPI) of 2,000 to 5,000 as of January 1, 2021, ”said RBI Governor Shaktikanta Das.
“Recent instructions on disabling contactless functionality on cards and empowering customers to control their card limits have also provided increased security for users. To promote the adoption of secure digital payments, it is proposed to improve, at the user’s discretion, the limits for contactless card transactions and electronic mandates for recurring card (and UPI) transactions from 2,000 to 5,000. as of January 1, 2021. Operating instructions will be issued separately, ”the RBI said in a statement.
What are contactless cards?
Contactless cards, whether credit or debit cards, have an additional feature that allows users to make payments without any physical contact. These cards use Near Field Communications (NFC) technology, allowing customers to make payments at payment terminals without swiping the card anywhere.
The transaction will be completed simply by placing the card on the reader machine. It is also not necessary to enter the pin. Currently, the limit for such transactions is capped at Rs 2,000.
“The RBI’s decision to increase the limit to Rs. 2000 to Rs. 5000 without entering a PIN on contactless transactions via NFC cards is a welcome move. In recent months we have seen a marked increase in contactless transactions on our network. This is due to the fact that the entire transaction is contactless and no one but the cardholder touches the card and ease of use is also very important, ” said Deepak Chandnani, Managing Director, Worldline South Asia and Middle East .
Furthermore, he added that NFC transactions follow RBI specified security protocols and payment schemes and cardholders can be sure that their transactions are carried out safely.
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