wordpress blog stats
Connect with us

Hi, what are you looking for?

, , ,

No need of PIN for transactions below Rs 2000 using NFC cards, says RBI


The Reserve Bank of India (RBI) has eased the norms for payments made using NFC-based or contactless cards and said that transactions below Rs 2,000 will not need a additional factor of authentication. The additional factor of authentication the RBI had earlier mandated was entering a PIN or an one-time password.

” 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 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, ”  the RBI said in a release.

So far only ICICI Bank has rolled out NFC-based cards in the market while the country’s largest lender State Bank of India (SBI) has announced its plans for the same. It’s worth nothing that way back in 2011, SBI had introduced contactless debit cards that doubled up as travel smart cards, enabling Bangalore commuters to pay for their journeys on the metro with a simple tap.

However, the RBI has maintained that two-factor authentication will still be in effect for ATM transactions and card not present transactions. Card not present transactions are those where a cardholder cannot present his or her card to the merchant to physically verify a debit and credit card.

What the RBI needs to address

Advertisement. Scroll to continue reading.

It’s great the RBI finds NFC technology provides security as well as convenience, but it has not addressed the untapped potential of the technology which lies in mobile phones. Most smartphones of the day are NFC enabled or can be enabled by sticking an NFC tag. Maybe some clarity on how NFC-based wallets in the country can operate can could help spur the growth of NFC-based wallet systems.

Another point for NFC-based cards which will affect its adoption is the number of point of sale (POS) terminals which can handle NFC cards. So far ICICI Bank has said that it has deployed over 1,200 Electronic Data Capture (EDC) machines capable of accepting contactless payments. But that number is still woefully low and NFC cards’ adoption will be in the hands of merchants who set up more POS terminals which can accept contactless payments.

Written By

MediaNama’s mission is to help build a digital ecosystem which is open, fair, global and competitive.



While the market reality of popular crypto-assets like Bitcoin may undergo little change, the same can't be said for stablecoins.


Bringing transactions related to crypto-assets within the tax net could make matters less fuzzy.


Loopholes in FEMA and the decentralised nature of crypto-assets point to a need for effective regulations.


The need of the hour is for lawmakers to understand the systems that are amplifying harmful content.


For drone delivery to become a reality, a permissive regulatory regime is a prerequisite.

You May Also Like


Google has released a Google Travel Trends Report which states that branded budget hotel search queries grew 179% year over year (YOY) in India, in...


135 job openings in over 60 companies are listed at our free Digital and Mobile Job Board: If you’re looking for a job, or...


Rajesh Kumar* doesn’t have many enemies in life. But, Uber, for which he drives a cab everyday, is starting to look like one, he...


By Aroon Deep and Aditya Chunduru You’re reading it here first: Twitter has complied with government requests to censor 52 tweets that mostly criticised...

MediaNama is the premier source of information and analysis on Technology Policy in India. More about MediaNama, and contact information, here.

© 2008-2021 Mixed Bag Media Pvt. Ltd. Developed By PixelVJ

Subscribe to our daily newsletter
Your email address:*
Please enter all required fields Click to hide
Correct invalid entries Click to hide

© 2008-2021 Mixed Bag Media Pvt. Ltd. Developed By PixelVJ