Digital Payment Security Control Rules Incoming For UPI And Credit Cards: How Does This Impact You?

The Reserve Bank of India (RBI) has confirmed that they will be releasing the new digital payment security control rules. The Reserve Bank of India (Digital Payment Security Controls) Directions, 2020 will come at a time when digital transactions are at their highest in terms of popularity as well as transaction value and will cover multiple instruments and methods including internet banking, mobile banking, UPI payments, mobile wallets and credit as well as debit card transactions. RBI says the new rules will make digital payments safer and more secure.

“Going by the pre-eminent role being played by digital payment systems in India, RBI gives highest importance to the security controls around it. Now it is proposed to issue Reserve Bank of India (Digital Payment Security Controls) Directions, 2020 for regulated entities to set up a robust governance structure for such systems and implement common minimum standards of security controls for channels like internet, mobile banking, card payments, among others,” says the RBI in an official statement. India’s central bank also says that the new rules will be technology and platform agnostic, with the objective of creating an enhanced and enabling environment for customers to use digital payment products in more safe and secure manner.

At this time, you will see absolutely no change in how you access digital payment tools, including mobile wallets and UPI payments, as well as credit and debit cards. You can continue to make payments as before. Nothing changes for you in terms of the digital payments apps or platforms that you may use, as well as the transaction security and authentication methods. If you use credit or debit cards, your bank or card issuer must be offering you options including the ability to switch on or off certain transaction types as well as set limits for various card features and transactions, including for contactless transactions.

As part of the larger Statement on Developmental and Regulatory Policies, the RBI has also said that there is further relaxation in the requirement of additional authentication requirement for credit card transactions. Users now utilize the contactless payment method and not have to enter a transaction PIN for transactions up to Rs 5,000 at physical stores now. Earlier, the limit for non-PIN required contactless transactions was Rs 2,000. “These are also well-suited to make payments in a safe and secure manner, especially during the current pandemic. The recent instructions on disablement of contactless feature on cards and empowering customers to control the limits on their cards have also brought in added safety for users,” says RBI. This rule will be applicable from January 1, 2020.

The UPI, or unified payments interface, transactions have been consistently growing month on month. The latest data by the National Payments Corporation of India (NPCI) indicates that UPI transactions for November 2020 clocked in at 2.21 billion, which is 6.7% more than the 2.07 billion in October. In September, the UPI transactions clocked in with 1.8 billion. Credit card transactions have also seen a spike in the past few months, as the coronavirus pandemic has fast-tracked the transition to digital payments. According to the RBI data, credit card transactions in India were clocked at around Rs 127,129 million in April this year when the lockdown was in place due to the COVID pandemic. However, as of September this year, the monthly transaction value had increased to around Rs 291,481 million. Similar growth has also been seen with debit card usage, in the same period.

Earlier this week, HDFC Bank was barred from issuing new credit cards and any digital banking product launches after the bank’s internet banking and mobile payments services saw multiple outages recently.