RBI, in a statement, said, "Of late, the Reserve Bank has been receiving requests from customers and entities in certain niche segments indicating the need to foster innovative payment products / processes and for enhancing the convenience factor in certain use cases / type of transactions without the need for having the mandatory additional factor of authentication (AFA)."
The Reserve Bank of India (RBI) has decided to relax the need for additional factor of authentication requirements for transactions upto Rs 2,000.
What this effectively means is that you won't have to go through the cumbersome two-step authentication process if the payment is valued at a maximum of Rs 2000 using contact-less payments like NFC.
RBI, in a statement, said, "Of late, the Reserve Bank has been receiving requests from customers and entities in certain niche segments indicating the need to foster innovative payment products / processes and for enhancing the convenience factor in certain use cases / type of transactions without the need for having the mandatory additional factor of authentication (AFA)."
In August last year, RBI had said that all transactions using credit or debit cards issued in India will have to adhere to a two-step authentication. The order had a direct impact on cab services like Uber that relied on seamless payment service for its customers.
RBI's introduction of the new norms was designed to safeguard customers from fraudulent transactions and enhancing security of card transactions. The Bank said that the move has resulted in strengthening both card present and card not present transactions and have significantly reduced misuse of cards.
However, after a lot of customer responses on the move, Raghuram Rajan, RBI chief said that the Bank is willing to work and solve the problem.
RBI said, "The requests have been examined from the perspective of the trade-off between security and convenience in card transactions and need for relaxation in extant instructions with suitable safeguards to protect customer interest in light of availability of new technologies. One such technology is that of Near Field Communication (NFC) which is used in contactless cards."
It said that banks are free to set lower than Rs 2000 per transaction limits.
RBI has also put up the draft circular on its website for comments from general public on card payments.
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