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Date: 18/05/2020
Card Transactions

(Updated on May 18, 2020)

1. What are various types of cards?

Ans: Cards can be classified on the basis of their issuance, usage and payment by the card holder. There are four types of cards (a) debit, (b) credit, (c) prepaid, and (d) electronic.

2. Who issues these cards?

Ans: Debit cards are issued by banks and are linked to a bank account. Credit cards are generally issued by banks and a couple of non-banks, but can also be issued by other approved entities. Prepaid cards are issued by banks / non-banks against the value paid in advance by the cardholder and stored in such cards which can be issued in the form of cards or wallets

3. What are the usages of debit cards?

Ans: The debit cards can be used to withdraw cash from an ATM, purchase of goods and services at points of sale (PoS) terminals or e-commerce (online purchase). While they can be used domestically, the international usage is also allowed if requested by the holder of the card. They can also be used for domestic funds transfer from one person to another subject to prescribed limits and conditions.

4. What are the usages of credit cards?

Ans: The credit cards can be used for purchase of goods and services at PoS terminals / e-commerce. These cards can be used domestically and internationally (provided they are enabled for such use). The credit cards can also be used to withdraw cash from an ATM and for transferring funds to bank accounts, debit cards, credit cards and prepaid cards within the country, subject to prescribed limits and conditions.

5. What are the usages of prepaid cards?

Ans: The usage of prepaid cards depends on who is the issuer of such cards. Prepaid cards can be open or semi-closed in nature and can be used to withdraw cash from an ATM, purchase of goods and services at PoS terminals / e-commerce and for domestic funds transfer from one person to another, subject to prescribed limits and conditions. While open system prepaid cards are issued by banks, semi-closed system prepaid cards can be issued by bank and non-bank entities.

FAQs on Prepaid Payment Instruments (PPIs) give further detailed information on PPIs.

6. What are electronic cards?

Ans: Electronic cards can be considered as debit cards issued in specific overdraft accounts that are in the nature of personal loan without any specific end-use restrictions. Banks have been permitted to issue electronic cards to natural persons having overdraft accounts so as to enable domestic digital transactions in such accounts. For all purposes like security, Additional Factor of Authentication (AFA), Merchant Discount Rate (MDR), etc., the instructions relating to debit cards are applicable on such electronic cards as well.

7. What are various methods of using a card at a PoS terminal?

Ans: A card can be swiped (Magnetic-Stripe card), dipped (Chip based card) or tapped (Contactless Near Field Communication {NFC} Card) at a PoS terminal.

8. What are Magnetic Stripe cards, EMV Chip & PIN cards and Contactless NFC cards?

Ans: The Magnetic Stripe card stores card data on the magnetic stripe present on the card while the data in EMV Chip & PIN cards is stored in a chip on the card. In a Contactless NFC card, the card is read by keeping the card near the card reader. The EMV Chip & PIN cards and Contactless NFC cards are considered to be safer when compared to Magnetic Stripe cards.

9. What are Card Present (CP) and Card Not Present (CNP) transactions?

Ans: A CP transaction is a card transaction that is carried out through physical presence of card at the point of transaction. It is also known as face-to-face or a proximity payment transaction. An example is a transaction carried out at an ATM or a PoS terminal. A CNP transaction does not require the card to be physically presented at the point of transaction. It is also called as a remote transaction. An example is an online transaction or a mobile banking transaction using the card.

10. Who decides the limits for cash withdrawal or purchase of goods and services through a card?

Ans: The limits on cash withdrawal at ATMs and for purchase of goods and services are decided by the card issuer. Cash withdrawal using debit cards and open system prepaid cards at PoS terminals has been allowed by Reserve Bank of India (RBI) whereby, a maximum of ₹2000/- can be withdrawn daily per card. Cardholders can check with their issuers for details of such facilities provided by them, if any.

11. Is there any way a customer can quickly come to know whether a fraudulent transaction has taken place using her / his card?

Ans: RBI has been taking various steps to ensure that the card payment environment is safe and secure. RBI has mandated issuers to send alerts for all card transactions so that a card holder is aware of transactions taking place on her / his card. In order to benefit from it, the cardholders are advised to register for SMS / e-mail alerts.

12. How are the transactions carried out through cards protected against fraudulent usage?

Ans: All CP and CNP transactions on cards issued in India are secured with AFA. This AFA can be in any form and few commonly used forms are PIN, dynamic one-time password (OTP), static code, etc. The requirement of AFA is not mandatory for transactions where outflow of foreign exchange is contemplated. Similarly, in case of CP transactions (except ATM transactions) using NFC contactless technology, transactions for a maximum value of ₹2,000/- per transaction are allowed to be undertaken without AFA requirement, subject to adherence to EMV standards.

13. What are the liabilities of a card issuer in case of fraudulent use of a card by an unauthorised person?

Ans: In case of CNP transactions, RBI has mandated providing AFA for domestic transactions. If a transaction has taken place without AFA and the customer has complained that the transaction is not effected by her / him, the issuer bank shall reimburse the loss to the customer without demur. Further, liability of a customer in case of an unauthorised electronic transaction is limited as per the provisions of RBI circulars DBR.No.Leg.BC.78/09.07.005/2017-18 dated July 6, 2017, DCBR.BPD.(PCB/RCB).Cir.No.06/12.05.001/2017-18 dated December 14, 2017, and DPSS.CO.PD.No.1417/02.14.006/2018-19 dated January 4, 2019.

These FAQs are issued by the Reserve Bank of India for information and general guidance purposes only. The Bank will not be held responsible for actions taken and / or decisions made on the basis of the same. For clarifications or interpretations, if any, one may be guided by the relevant circulars and notifications issued from time to time by the Bank.

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