In a new initiative by the Reserve Bank of India (RBI), customers preferring to opt for cashless transactions can now opt out from having to key in their card details at merchant locations. This includes opting out from having to enter the PIN number each time a cashless transaction is done.
These new norms, under the ambit of the relaxation in additional factor authentication (AFA), are applicable to transactions going up to a maximum of Rs 2,000. To avail this new initiative, you can visit your bank and opt in for the card-not-present facility by registering all your card related details once.
After registration, you can visit a merchant establishment and choose to use your card without having to enter your PIN number. The registered details would constitute the first-factor authentication and these would be automatically detected thereby letting you skip the manual entry process which constitutes the two-factor authentication.
As of now, the RBI has issued guidelines to all scheduled commercial banks, urban/state co-operative banks and all member institutions to offer their customers the option to skip second-factor authentication while carrying out transactions lesser than the value of Rs 2,000.
For transactions valued at more than Rs 2,000, both the authentication mechanisms are mandatory.
"The relaxation for AFA under such solutions shall be applicable for card not present transactions for a maximum value of Rs 2,000 per transaction across all merchant categories. Banks and card networks are free to facilitate their customers to set lower per transaction limits," the RBI said in a statement.
These new measures come at a time when demonetisation threatens to expose money launderers and black money hoarders. As per new directions from the RBI, new Rs 20 and Rs 50 notes would be made available soon in addition to the Rs 2,000 and the new Rs 500 notes.