The Reserve Bank of India (RBI) proposed to increase the transaction limits for the contactless card and e-mandates for recurring transactions through cards and UPI from Rs 2,000 to Rs 5,000. The move from RBI is to ensure faster adoption of digital payments safely and securely. The change will be effective from January 1, 2021, and will be at the discretion of the user of the card. This statement was part of the RBI’s bi-monetary policy announcement which was held on December 4, 2020.
The officials of RBI said the real-time gross settlement (RTGS) system will be made available throughout the day. This should be made soon. RBI Governor Shaktikanta Das commented that after the successful completion of the process it is expected to reduce settlement and default risk in the system. This is by facilitating settlement of AePS, NFS, RuPay, UPI, NETC, IMPS transactions on all days. There has been an exponential growth in contactless digital payments in the last few months. This is because users are increasingly choosing to pay safely and hygienically for their day to day needs.
In consonance with the RBI’s statement on Developmental and Regulatory Policies, there was a boost in benefitting from increased use of technology and also contactless card transactions and e-mandates on cards (and UPI) for recurring transactions have boosted customer accessibility. These developments will ensure safe and secure payments, especially during the current situation. The recent instructions given by RBI will provide added safety for customers. The latest move on disablement of contactless features on cards and empowering customers to control the limits on their cards will bring safety for users.
Ashwini Kumar Tewari, Managing Director & CEO, SBI Card expressed that decision by the RBI to increase the limit on contactless card payments from Rs 2,000 to Rs 5000 is a positive and progressive decision. He also added that during the prevailing conditions this move will add to the customer convenience and also boost the digital payments ecosystem in the country. Mastercard also welcomed the decision to increase the limit without entering a PIN on contactless transactions through NFC cards.