The Reserve Bank of India (RBI) on Wednesday directed banks to offer the facility to carry out contactless card transactions only to those users who specifically choose to avail it. In a notification on its website, the central bank said the directive is aimed at improving user convenience and increasing the security of card transactions.

At the time of issue or reissue, all physical and virtual cards shall be enabled for use only at contact-based points of usage, that is, ATMs and point of sale (PoS) devices within India. Issuers shall provide cardholders a facility for enabling card-not-present domestic and international transactions, card-present international transactions and contactless transactions, as per a process detailed by the RBI.

The banks must provide to all cardholders a facility to switch on or off, set and modify transaction limits within the overall card limit for all types of transactions. This facility must be made available on a 24×7 basis through multiple channels, including mobile applications, internet banking, ATMs and interactive voice response (IVR). It may also be offered at branches or offices of the issuer.

Further, the issuer must send alerts to the user through SMS and e-mail, as and when there is any change in the status of the card. Banks will be entitled to take a call on whether to disable the additional features for existing cards that allow contactless and card-not-present transactions as well as international transactions.

“For existing cards, issuers may take a decision, based on their risk perception, whether to disable the card not present (domestic and international) transactions, card present (international) transactions and contactless transaction rights. Existing cards which have never been used for online (card not present)/ international/ contactless transactions shall be mandatorily disabled for this purpose,” RBI said in the notification.