Using a credit and debit card online? Here are the new rules from July 1st


From July 1, the way you use your credit or debit cards online is expected to change as new rules from the Reserve Bank of India are expected to come into effect.

In April, the Reserve Bank of India (RBI) proposed new rules for debit and credit cards with security of user details as a key feature.

Among them, RBI introduced card tokenization for transactions from July. Additionally, you can also change your credit card billing date.

This means that you will no longer be required to register your card details, including your card number and expiry date on the merchant’s website.

The central bank said a tokenized card transaction is considered more secure because the actual card details are not shared with the merchant while the transaction is being processed.

Here’s everything you need to know about the new online payment rules for credit and debit cards: (Use the H2 tag)

What is tokenization?

Often when we shop online on Amazon, Flipkart or other sites, we save our card details so we don’t have to enter them every time we buy something.

However, this sometimes becomes risky as a lot of user data is leaked if the sites are hacked or compromised.

For this, RBI has developed card tokenization which converts your card details into a unique code called a “token” which is specific to your card and to one merchant at a time.

The code does not reveal your card details and can be saved to the online portal server.

This prohibits all online shopping portals from recording your card numbers, CVV, expiration date, etc. on their servers. So, you can either create a token for online transactions or even choose to enter card details every time you buy something online.

So when you select the token option, the merchant will end the request with your bank or card networks, and a token will be created which you can save for future transactions.

Keep in mind that a token is merchant specific, so your card will have a different token, say Myntra and Flipkart.

But what if you have multiple cards?

If you use multiple cards, it may be difficult for you to keep an eye on all the cards you have tokenized on which websites, for this the issuing bank will provide a dedicated portal to manage the tokenized cards. So you can see them and delete them if you no longer want them for a particular website.

Is tokenization beneficial for you?

Since merchants can no longer save your card details and only the last four digits of the card number will be visible, there is an extra layer of protection against fraudsters against credential theft.

Other credit and debit card rules in effect from July 1

Apart from tokenization, several new rules have been introduced by the RBI. Under the new rules, the credit card closure request must be completed by the credit card issuer within seven days subject to payment of all dues on behalf of the cardholder. If the issuer does not do so within 7 days, a late penalty of Rs 500 per day will be granted to the client.

For credit cards not used for a period of more than one year, the card issuer may initiate the process of closing the account after notifying the cardholder. Any credit balance available on the credit card account must be transferred to the cardholder’s bank account.

In addition, if a person receives a credit or debit card without asking for it, the banks will face a double penalty. Cardholders will also have the option to change the credit card billing cycle according to their preferences.

In addition, any credit amounts from failed refunds, canceled transactions or similar transactions before the payment due date for which the cardholder has not made payment will be adjusted to “payment due”. and reported to the cardholder.

Card issuers are also required to obtain permission from the cardholder to adjust credit amounts above a threshold of one percent of the credit limit or Rs 5,000, depending on the value. lower, resulting from a refund, failed, canceled transactions or similar transactions against the credit limit. for which the cardholder has already made the payment. Within seven days of the credit transaction, authorization must be requested by email or SMS.

Under the new rules, card issuers must ensure that invoices are emailed to users promptly and that the consumer has a sufficient number of days to pay before interest is charged.


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