Your Debit/Credit Card Will Stop Working If It Doesn’t Have This Feature; 3 Reasons Why This Is Important
Starting April 29th, all debit cards in the country, which doesn’t have the EMV chip, will stop working. Hence, non-EMV Chip-based debit cards cannot be used for withdrawing cash now, and literally, they will be useless.
What is the point of this rule? Why has RBI made it mandatory for everyone to have only EMV Chip-based debit cards?
Keep reading to find out more!
RBI Rule For All Debit And Credit Cards
In 2015, RBI had released a notification under 18 read with Section 10(2) of the Payment and Settlement Systems Act, 2007 (Act 51 of 2007), which made it compulsory for all debit and credit card holders to have a chip-based card.
As per the notification, the last date for implementing this rule was December 31st, which was later extended to April 29th, 2019.
Banks Will Replace Your Card
RBI has mandated that every bank should exchange the old debit and credit card with the new chip-based cards, as soon as possible.
Mass SMSes have been circulated, and most of the banks are replacing the existing cards for free.
The old cards are magnetic based cards, which are prone to frauds and cheating, wherein users can lose money. ATM skimming, for example, is a very widely used fraud activity where the information stored in the magnetic stripe is stolen, and then used cloned to create a copy of the card.
With EMV Chip-based cards, these frauds are not possible.
Why EMV Chip Based Debit/Credit Cards?
EMVCo exists to ‘facilitate worldwide interoperability and acceptance of secure payment transactions’ and is overseen by EMVCo’s six-member organizations—American Express, Discover, JCB, Mastercard, UnionPay, and Visa; besides being supported by ‘dozens of banks, merchants, vendors and other stakeholders.’ (More information here.)
Three reasons why this is an important step:
- Fraudless Transactions: The biggest differentiator between EMV Chip-based cards and magnetic stripe based cards is the storage of information: The EMV Chip cards store their information in the small chip which is embedded into the card.
In order to carry a transaction, the user will have to enter a password as well.
In the magnetic stripe card, the information is stored in the magnetic stripe, which can be easily cloned by skimming devices.
Hence, RBI’s rule to only use EMV Chip card is based on the premise of security and safety of users.
2) Mobile Transactions: The second reason is mobile transactions: Using the chip, the merchants can now simple wave the debit card or credit card over their PoS machine, and the transaction shall be completed. Hence, as this process involves zero physical contact of the card with any POS machine, it will help in reducing frauds and cheats.
3) Offline Transactions: Internet is not required while using EMV based cards: This will be a big boost for Digital India vision, as the magnetic-based cards had to use the Internet for authenticating the transactions. This will help users from deep rural hinterland to use cashless transactions and will be beneficial for all users.
Have you changed your debit/credit card into EMV Chip-based cards?