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.
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!