RBI relaxes ‘card not present’ transaction norms

The registered customers will not be required to re-enter the card details for every transaction at merchant locations that offer this solution and thereby save time and effort.

By: ENS Economic Bureau | Mumbai | Updated: December 7, 2016 3:11 pm

The Reserve Bank of India (RBI) has relaxed the authentication norms for payments up to Rs 2,000 in the case of ‘card not present’ (CNP) transactions in a bid to boost online cashless payments using credit and debit cards and address the cash crunch after demonetisation of Rs 500 and Rs 1,000 notes.

“In this model, the card issuing banks will offer the “payment authentication solutions” of the respective card networks to their customers on an optional basis. Customers opting for this facility will go through a one-time registration process requiring entry of card details, etc. and AFA (additional factor of authentication) by the issuing bank,” the RBI said in a notification.

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Thereafter, the registered customers will not be required to re-enter the card details for every transaction at merchant locations that offer this solution and thereby save time and effort. In this model, the card details already registered would be the first factor while the credentials used to login to the solution (as confirmed by the card network providing the solution) would be the additional factor of authentication, the RBI said.

‘Card not present’ transactions are those where a card holder cannot present his or her card to the merchant for physical examination at the time of the payment. The RBI said “the AFA requirement for transactions up to Rs 2,000 for online CNP transactions for the ‘payment authentication solutions’ provided by authorised card networks with the participation of respective card issuing and acquiring banks is being relaxed” subject to the condition that customer consent should be taken while making this solution available to them.

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