New Debit / Credit Card Rules by RBI to Dis-allow International Usage!

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Although, the percentage of Banking Cyber Frauds have reduced over past 4 years, it is still quite high and many consumers end up loosing lot of money to it. Reserve Bank of India has recently announced changes in the Debit / Credit Card issuance and usage to curb cyber security frauds.

These changes may end up reducing the frauds, but will cause lot of inconvenience to users, especially to those who make purchases on international e-commerce sites. Here is an overview to changes that will soon be introduced by Banks.

Emv Chip Enabled-001

Overview of Debit / Credit Card Changes by RBI

1.) All the new Debit or Credit card issued by banks will allow usage in India only. If the customer wants carry out international usage, the cards will have a EMV chip embedded on the card and will pin enabled.

2.) For existing Debit and Credit card customers, the issuing bank will need to convert the normal cards (which have traditional magstrip) into EMV chip and pin enabled (this will be one for users who have used the card internationally atleast once). The process will needs to be completed by June 30th 2013.

3.) Banks will put a threshold limit on international usage beyond which users will not be able to spend. The limit will be decided by Bank based on the risk profile of user. This process will needs to be completed by June 30th 2013.

4.) Banks need to ensure that all terminals that accept card swiping should be certified for PCI-DSS (Payment Card Industry – Data Security Standards) and PA-DSS (Payment Applications – Data Security Standards). The process will needs to be completed by June 30th 2013.

Apart from these new rules, RBI has also directed Banks to frame rules to ensure that cyber frauds are eliminated from the system. Banks will need to analyze patterns of usage and move towards real-time fraud monitoring system. Banks are also directed to provide easier methods to users to block their cards immediately (Like on SMS).

Check out entire list of changes proposed by RBI

How will these changes affect normal Debit / Credit Card user

The changes proposed by RBI are great with respect to arresting cyber fraud cases, however, it will also make it very difficult for users to use their card outside India, especially when it comes to electronic purchases.

With all international cards now being enabled for EMV Chip and pin, it will not be possible to use them online ( this is extra layer of security, where user will have to input pin number after usage of card) as most of the online merchants will not have a facility to input pin during process of payment authentication.

The biggest problem is because these rules apply to Credit cards as well. Most international debit cards issued by Indian Banks could not be used on international sites even now, but Credit cards were accepted. Now, even CCs may not work!

"New Debit / Credit Card Rules by RBI to Dis-allow International Usage!", 5 out of 5 based on 1 ratings.

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  1. C.Vinoth David says

    Can somebody pls help on how to purchase in aliexpress.com.I have both VISA and Maestro debit cards but it’s not working.

  2. Rajarshi Manna says

    I have also same problem dear,

    My debit card is also replaced by new one ( chip enabled) as per RBI rule and the new debit card is not working in paypal account.
    So can anyone tall me how to add this debit card to paypal account.

    Credit card can be used inplace of debit card for paypal account ?

    Please help me.

    I am now helpless.

    Rajarshi

    9732848683

  3. Rohit Tiwari says

    So this is why my Axis Bank Debit Card doesn’t work on Entropay. Earlier I used to pay through my PNB debit card which wasn’t ‘chip’ based card and it worked on Entropay flawlessly. But this axis bank card is ‘chip’ based and it just doesn’t work. I mean come on! Now i can’t even buy apps on google playstore? What the hell is RBI doing? I can’t pay on Steam. I can’t pay on Entropay. I can’t pay on PayPal. I can’t pay on google Playstore. Where the hell can I pay? Flipkart?? Wt*?

  4. Sanu says

    i want to pay on aliexpress.com. all my sbi/sbt visa deit cards not accepted. which way i can pay ?

    Pls inform me

    Sanu
    Sanojpraj@gmail.com
    +91 9809904909

    1. Rohit says

      I got my chip based credit cards after using the earlier non chip ones on alibaba. Further, I have successfully used the chip based cards on alibaba without any problem. Although it didn’t ask for any username or pin i.e. security was least in these transactions.

  5. Mayur says

    Can you suggest me on how can i transfer money from my Debit card to my entropay account ( virtual visa account) ?

  6. Sunny says

    Great step in order to visit our predecessors. Accolades to RBI for throwing India back to the 20th century. Next step would be to prohibit the utilisation of card based transactions at shops and restaurants. Last stage would be to limit the withdrawal of funds from the ATM to 1 transaction a month. What kind of jerks are sitting high up there? Obviously, they are a group of wretched monkeys who are unaware of progress happening in the advanced parts of the world.

  7. Khalsa-007 says

    India is already called as third world. no after the new rbi guidelines we would be cut off from rest of the world..thanks to rbi now be would be known as 4 or 5th world

    if rbi really meant to stop frauds why dont they stop frauds happening in the country it self like 2g , shara fraud and there are many more
    i m really disappointed on the new guidelines

    they disable indian cards for online payments so why dont they stop the plastic money completely

    and still i say i m proud to be indian

  8. Prabu says

    RBI really done a good job. My long time expectation of online security. Shopping simply entering card details is foolish method. There should be atleast one authentication process to protect money. This will also protect the money of those who dont have depth knowledge in online shopping. The new rules will force the merchant to implement 3D Secure Authentication. Because a sales man will do anything to sell the product… They are just going to implement the payment gateway which enable 3D Secure Authentication. Wait and see the game

    1. Arjun Mayilvaganan says

      Personally, IMO, it has to be the user to choose between whether he wants a card that has that 3D security or Just that blank processing after entering the card without any further verifications. The purpose is going to be that of user’s and not RBI’s. It’s my damn money, that i’m going to lose, if at all. Not RBI’s.

  9. Manoj Goyal says

    what RBI wants to do, we are going to be called backward Indians, soon we will have to purchase big bags to carry money if going abroad, please friend start a campaign against that on social sites like facebook , current system is secure enough and if some people need these type of secure card they should have an option why we all are compelled

  10. om says

    If RBI is asked how to reduce the occurrence of Road Traffic Accidents in India, based on these guidelines, they are sure to come out with the most innovative & guideline: ‘Do not come out from your home!’

  11. Leo G says

    Why Can’t the atleast consult users before making such wise decisions

  12. Edward says

    Arun, can you publish the panel of Advisors who have recommend the government to implement such Non Sense rules.

    1. Arun Prabhudesai says

      Hahaha…true, I should actually try and find who are those ultra intelligent species :)

      Arun

      1. Albert says

        One year before my friend met RBI person in Chennai. My friend wants to discuss about PayPal and it is functions in India. So he asked, Why PayPal is not allowed in India while it is working better in other South Asian countries?

        He said, “What is PayPal?”

        You can’t avoid these type of ooops from RBI.

  13. Altaf says

    I have a HDFC Debt card. It worked for me in Bangkok, Dubai, Qatar for shopping. (I never do online shopping so never knew) Dont know if it will after June 30. I am sure the process starts with them (Govt or RBI) making the guidelines. Based on practicality and after people suffer, based on the backlash, they will fine tune the procedures. It happens all the time. They may even postpone the deadline like with new cheque books.
    Looks like I have to check with my bank for new kind of DC with chips.

  14. Mohammed Abdullah Khan says

    Will it effect Internet banking ?

  15. kevin says

    What if someone going to USA for holiday or for business ..so he should pack his bag with money because he would not be able to use his credit card there because it is blocked or has a CAP limit ..ha ha ..Look this situation if someone goes to holiday out of India(usa ,uk etc. ) and his credit card authorization failed at hotel or have CAP limit ..what would be the situation ..I think he should be begging there after that because he would never return..ha ha

    1. Arun Prabhudesai says

      @kevin – That for me is a biggest thing…capping the amount you can utilize…that is sure to cause problems to many…

      1. kevin says

        No ,It will never happen ..what about those who earn lots of money and those who don’t ..must be something else ,we are missing something here

  16. Rahul Ghosh says

    These people have no idea what they are doing…they are taking India 100 years behind… they don’t understand the fact that some people make a living online and is constantly brining USD to India..which is an advantage for the country.

    1. Dev says

      I’m an internet marketer myself and after the new HDFC chip card, HDFC stopped netsafe VCC facilities and I cant even use this card to add funds to Entropay. I have filed multiple complaints and none of their agents know about this rule either it’s just frustrating.

      1. shishir says

        Dear Dev, As it apprears you are a regular user of Entropay, can you tell me the procedure for making refunds to indian banks from entropay???

  17. Adarsh Thampy says

    Awesome way for RBI to say FU to Indians. First they mess with paypal and now CC? How on earth are we going to pay for Hosting payments, hiring other freelancers (odesk) etc… Does RBI want us to open US bank accounts and apply for US credit card?

    1. Arun Prabhudesai says

      @adarsh thampy – To be honest things are not very clear right now. If you want you can go through the RBI document link that I have given in the article. It will all be upto Banks how they implement EMV chip and pin system. If it does not affect online payments then much of the problem will be solved… But that is not it… RBI is also planning to setup a cap of transactions and it will be done on the basis of Credit ratings…just like in case of Credit cards… That may create problems to many!

    2. Tanmay says

      @Adarsh
      Hi, I wanted to know if I can use any of Axis bank/ state bank of patiala/ bank of India (master cards) debit card to get my payment method verified on odesk and can I subsequently pay by my this debit card.
      Please reply if I can use any of the three.
      If any of the three do not work tell me the one that will work or if you have verified by any as I do not have a credit card.

      Tanmay

    3. Tanmay says

      @Adarsh
      Hi,
      Can you please tell me which of the following debit cards can be used to verify odesk payment method
      Axis bank/ state bank of patiala/ bank of India (master cards) debit card and can I subsequently pay by my any of these debit cards.
      If any of the three do not work tell me the one that will work or if you have verified by any and also I do not have a credit card.

      Tanmay

  18. Tejas says

    Arun if you had taken interest in reading what you’ve written you might’ve understood that its a security feature for our own benefit. Also almost all new cards being issued now are chip-enabled.

    There isn’t going to be any specific ban / restriction on International Transactions as such. Only they’re going to be more secure.

    1. Arun Prabhudesai says

      Dear Tejas,

      Please read the article… I am not at all telling that they are banning it… What I am saying is their will be EMV chip and Pin (very similar to 3D secure for debit cards). It is obviously an extra layer of security… but if you have used a chip based credit card online, you know that many times it does not work, as it requires pin to be given for every transaction. I had a HSBC card with EMV chip, and I could never use it for online transactions… While it was much safer against cyber frauds, it was a big inconvenience, if I could not use it…and that is the point I am trying to make here..

      1. Tejas says

        I agree that its a hinderance, but I too use a EMV chip enabled card by HDFC, and it works just fine for me. Never had any problems, I buy stuff from the US / UK regularly on it, and its never given me any hint of trouble. even apps on the Apple / Android / Blackberry App Stores. Recently even bought a LG Nexus 4 too. :P Maybe there is some mix-up at HSBC end.

        On an un-related point, was browsing through your website y’day and liked your interactive nature, taking the pains to reply to each and every post. That is something I liked. :) My congratulations. :D

  19. daksh says

    Just ordered lens for my iPhone 5 from photojojo.com yesterday :)

  20. Krish - Fruit Travel says

    I wish something of this sort is done to get back the black money sitting in foreign banks. Duh !

  21. bobitt says

    hope Facebook will update the payment system

  22. sahil says

    Hello Arun,

    As far I know for international transaction you don’t even need to give 3D secure pin which is used for Indian transaction

    How will now this EMV based cards will be more secure for international transaction

    1. Arun Prabhudesai says

      99% of international websites do not accept Indian (international) debit cards because of 3d secure pin…which is extra layer of authentication… Try on any foreign website and it will not allow the transaction… Like 3d secure pin, emv chip and pin will be extra layer of authentication which will be needed and the websites will have to make provision for that, which most of them dont do it..

      1. sahil says

        But I have seen Indian banks cards allowing foreign transaction on US site without 3D pin

        1. kevin says

          @Arun ,u r wrong here ,I use Axis card and when I pay on Indian website ,I give PIN and when I pay internationally ,They don’t ask for PIN only 3 D secure form ..that’s it

        2. Tushar says

          Yes I also seen this. When I use my Axis bank debit card for ebay.in it uses to ask to the 3D secure pin , but for Godaddy.com it doesn’t ask still I can make the transaction.

      2. Edward says

        Arun, i have to disagree with some of your personal opinions expressed about the International usability of Indian Debit Cards.

        I have been extensively using my Visa ICICI Debit Card without a EMV Chip while on my foreign visits and have also ordered on International online stores like Aliexpress.com without any issues.

        It is an Indian Myth that Debit cards(Visa/Master/AMEX,Etc) issued by Indian Banks cannot be used internationally or for purchases on International E- Commerce sites.

        This is a false propoganda created by MNC banks to promote the use of credit cards.

        Coming back to the new rule…

        This rule may not be practically possible to enforce because millions of Indians visit foreign locations on Tour, Business or pilgrimage . You don’t expect everyone to have a EMV Chip card or carry truck loads of cash with them.

        The biggest losers will be

        Employers in India employing freelancers ( Freelancer.com /Elance/Odesk,etc)

        Millions of Websites which provide online products and services as a subscription basis or as a one time purchase

        Online Advertisement Payments

        Instead of facilitating and providing a platform for smooth functioning of online and offline purchases, the RBI seems to be taking steps which will take us back to stone age times.

        Looks like our Industry Leaders are sleeping, they should get together and object this rule.

        The world is moving towards Crowdfunding and Crowd Lending and we are still stuck in 1900.

        1. Arun Prabhudesai says

          Dear Edward,

          Generally all Indian Debit cards have an extra layer of protection called 3D secure…which asks for password after you have given the Debit card number on any site. Most international websites do not support it and hence you cannot make payments using debit card…few of them do have the facility and you can use it with them.. This is in case of online orders only. For offline, the international debit cards do work.

          Please check the article and subsequent comments… While I am all for security, it should not end up causing more harm…thats my point. Now Debit cards will be domestic only, unless otherwise applied..secondly, there will be a limitation cap on how much you can spend…and then you have EMV chip and pin…which needs to be supported… For EMV enabled Debit cards, you will need separate Card readers, which many do not have… Also, it probably (I am not 100% sure) will create issues while having online transactions as well..

          Thats the point of the whole article..

        2. Tanmay says

          @Edward
          Hi, I wanted to know if I can use any of Axis bank/ state bank of patiala/ bank of India (master cards) debit card to get my payment method verified on odesk and can I subsequently pay by my this debit card.
          Please reply if I can use any of the three.
          If any of the three do not work tell me the one that will work or if you have verified by any as I do not have a credit card.

          Tanmay

  23. Rajandran R says

    Hi,
    What if the user pays via Paypal ( account linked with Credit Card )?

    1. Arun Prabhudesai says

      As far as I can say, your credit card will probably have to be re-authenticated, once the bank implements the policy of EMV Chip and Pin…

  24. Sid says

    I just applied for a credit card man! :(
    Hope they take as much time to imply this as the indian govt takes to build flyovers and bridges.. …

    1. Arun Prabhudesai says

      June 30th, 2013 is what they are saying… and the ball is in court of Banks…they have to implement it. Governments job is done by coming out with rules… They have to just make sure that Banks implement it timely… So according to me, it is going to happen without a doubt.

      1. Sid says

        Its that kind of “Down the spine” annoyance you feel when you are asked by your mobile documents as some new “audit” is happening. failing which they terminate our service. I see this on similar grounds… !!

    1. Arun Prabhudesai says

      It will affect everything…for sure on Facebook… When you pay FB, you are paying to an international account so it is going definitely change…As far as I can say, it will also affect buying on Indian sites…because with EMV Chip and Pin coming in, for every online purchase you will have to give that (I am not 100% sure, but thats how it will be). So even our Indian sites will have change that in accordance with new rules..or the card will not get authenticated.

      1. anikethdsouza says

        This is going to affect all online businesses. Do you have an access to the official document? Need a lawyer or something to decode this!

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