The Reserve Bank of India (RBI) has removed the mandatory two-factor authentication for transactions below Rs 2,000 using NFC based credit and debit cards across all merchant categories in the country to promote contactless technologies. The banking regulator also advised all banks to put in sufficient velocity checks (how many such small value transactions will be allowed in a day / week / month) as considered appropriate. However, the RBI in its circular said that the relaxations will not apply to ATM transactions and card not present transactions (i.e. for online transactions using cards) and two-factor authentication will still apply to them. Transactions beyond Rs 2,000 limit will also continue to be treated as contact payment, wherein the additional authentication would still be mandatory, the RBI added. The RBI also added that customers cannot be compelled into making a contactless payment, and if they insist, they can still make a contact payment with the additional factor of authentication. Migration to EMV payment standards The apex bank directed that contactless cards issued by banks should adhere to the EMV payment standard so that it is acceptable across the existing card acceptance infrastructure. Last week in a notification, the RBI also mandated that all new cards issued by banks – debit and credit, domestic and international – to be EMV chip and pin based cards from September 1. The banking regulator is also framing a migration plan for existing magnetic stripe only cards. Banks which issue NFC cards Yesterday, the country's largest lender, State Bank of…
