In a Circular dated 4th December, 2020 the Reserve Bank of India has issued information regarding “Card transactions in Contactless mode – Relaxation in requirement of Additional Factor of Authentication”.
The present COVID-19 pandemic has underlined the benefits of contactless transactions. Keeping this in view and based on stakeholder feedback, it was announced in the Statement on Developmental and Regulatory Policies dated December 4, 2020 that per transaction limit for AFA (“Additional Factor of Authentication”) relaxation for contactless card transactions will be increased.
Accordingly, given the sufficient protection available to users, RBI has decided to increase the per transaction limit to ₹ 5,000/-. All other requirements, including the discretion of cardholder to use contactless or contact mode of transaction, shall continue to remain applicable, as hitherto.
Background:
In a previous Circular dated 14th May, 2020 the RBI had informed that Additional Factor of Authentication (AFA) requirement was relaxed for values up to ₹ 2,000/- per transaction for card transactions in contactless mode at Points of Sale (PoS) terminals. Subsequently, it was clarified that transactions beyond this limit can be processed in contactless mode, but with AFA.
Further, through another Circular dated 15th January, 2020, users were provided option of switch on / off or to set limits for various card features, including for contactless transactions. The instructions, which came into effect from October 1, 2020, have made card transactions more secure by empowering users to enable card features and set requirements according to their need and comfort.
Now, in light of the pandemic and the stakeholder feedback the per transaction limit for AFA relaxation for contactless card transactions are increased.
Source: Reserve Bank of India
