Plastic money just got safer :: Business Line

With entering the PIN compulsory for processing any payment at a merchant outlet, the risk of fraud on your debit card reduces significantly.

Beginning December 2013, the RBI had mandated that when you use your debit card to pay at a merchant outlet, you must punch in your PIN to complete the transaction. This rule adds to the security of your debit card transactions.

Added security when swiping

So far, the RBI has implemented many measures to prevent card frauds online. This included second-level authentication (one-time-password or verified-by-Visa/Mastercard checks) for online transactions.

Also, the introduction of virtual cards did away with the need to enter your actual card details online.

But card transactions swiped at merchant outlets remained vulnerable. All one had to do to complete a payment was to give the debit card, get it swiped and then sign the charge slip. The amount was immediately debited from your bank account.

If the card was stolen or lost, there was a real risk of misuse – even before you could inform your bank and get the card blocked. Since a debit card is directly linked to your bank account, a lost or stolen card meant the risk of your account being swept clean in quick time.

Then, there was the risk of ‘skimming’. Essentially, conmen extract (skim) cardholders’ personal information such as names, card numbers, card expiry dates, and CVV numbers stored in the magnetic strips of cards.

This is then used to make duplicate cards to indulge in fraudulent transactions. With the PIN entry compulsory for processing any payment at a merchant outlet, the risk of unauthorised use on your debit card even it is stolen, lost or skimmed reduces significantly.

Entering a wrong PIN thrice will result in the payment transaction being cancelled.

Since for a scamster, it now takes two to tango, knowing your debit card details will not take him too far. Unless, of course, the person who lays his hand on your card or duplicates it also knows your PIN.

Safety precautions

Along with the debit card, keep the PIN secure and confidential. Memorise your PIN – don’t write it down on a piece of paper and carry it along.

Punch in the number yourself into the point-of-sale instrument – ask for the instrument to be brought to you (portable instruments are getting in vogue).

If this is not possible, take the trouble of walking the distance to where the instrument is located.

Do not hand over your debit card and reveal the PIN to the person collecting the payment .

Also, when punching in the number at merchant outlets, be discreet. Keep changing your PIN regularly – this will throw would-be card pinchers off the scent.

Remember that, except when you are making a payment through computerised interactive voice response systems, no bank or its official will ask you to reveal your PIN.

So, don’t fall for fraudulent e-mails or phone calls which solicit such confidential information.

Punching in the PIN is not yet compulsory for credit card transactions at merchant outlets. This is, perhaps, because the use of credit cards is restricted to pre-set limits, unlike debit cards where you can spend as much as you have in the bank account.

That said, PIN entry for credit card payments too will only add to transaction security, and this may also be mandated in the future.

Chip cards for global transactions

With many cases of card fraud and misuse originating from international transactions, the RBI has tightened the screws on this front too.

From December, chip-based debit and credit cards will be required for international transactions – online, at ATMs, or at merchant outlets.

These cards are embedded with EMV (Europay, Mastercard, Visa) chips which encrypt user data and make card skimming much more difficult. So, chip-based cards which are dipped rather than swiped at merchant outlets score over the magnetic strip-based cards mostly in use now.

For those who have used their magnetic strip-based cards even once earlier for international transactions, banks will replace it an EMV chip-based card.

And those who haven’t yet used their cards for international transactions but intend to – apply to your bank for a chip-based card.

Until you get your chip-based card, you will be still able to use your magnetic strip card for international transactions but only for a restricted amount decided by your bank – say $500.

If you need to spend more internationally, you will have to request your bank to enhance the limit.

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