American financial service Visa and Mastercard, along with industry body Payment Council of India (PCI), have reached out to the Reserve Bank of India (RBI), seeking relaxation on ‘tap-and-go’ contactless payment limit.
Currently, a person can make contactless payments worth INR 2K through the ‘tap-and-go’ feature, any transaction above that would require a PIN number. In the wake of Covid-19, financial services want the limit to be relaxed to INR 5,000 to eliminate the requirement of handing over cards and avoid touching the swipe machine for a larger base of transactions
According to the companies, the proposed relaxation would make the point-of-sale (PoS) payment safer for both merchants and customers. The presentation was made by the representatives of Visa and Mastercard, during PCI’s interaction with digital payments regulators. PCI is an industry body with members from all leading digital payment companies.
A person, aware of the matter, told Economic Times that the players had argued that a relaxed limit could see increased adoption of contactless payments as they have been established as a safer way to make card payments. The companies have also suggested alternatives like relaxing the limit to INR 3,000 or a temporary relaxation for six months.
Visa, in a conversation with ET, elaborated that several authorities, banks and networks in over 55 countries around the world including Europe, the UK, Middle East, South Asia have already set higher transaction limits for contactless card payments. These enhancements are purely aimed at supporting banks in their efforts to push digital transactions in a post-Covid-era, the company added.
Specifying that contactless payments are convenient, safe and secure, a Mastercard spokesperson said, “this move would enable consumers to stay safe by reducing touch points while making transactions in the current situation.”
Last month, the RBI had given green signal for Visa, Mastercard and the National Corporation of India (NCPI) to allow tap-and-go functionality on card payments for all purchases at retail stores and shopping centres to allow the customers to make payments without having to swipe their card, even for purchases above INR 2K.
However, the financial service providers had to activate a two-factor authentication process, which required PIN number, for transactions above INR 2K. An official aware of the matter had highlighted that it now depends on banks and payment participants to bring about a change in payment infrastructure.
The official had also clarified that the changes required are “not too complicated”. “The card issuers, merchant acquirers, and consumers need to be readied. It should be a matter of three months if all goes well,” they added.
Both financial services Visa and Mastercard have launched contactless payment functionalities into their payment systems since last year. Visa had launched ‘ tap-and-go’ contactless card payments in February last year, whereas Mastercard had launched this feature in December 2019. Meanwhile, India-based Paytm Payment Bank had launched a similar contactless payments solution, Paytm Tap Card, in April 2018.
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Link : https://inc42.com/buzz/visa-mastercard-seek-rbi-nod-to-relax-tap-and-go-payment-limit/
Author :- Kritti Bhalla
May 28, 2020 at 11:29AM
Inc42 Media