The Reserve Bank of India (RBI) continues its forceful direction on payments as Non-EMV cards get blocked in the market effective January 1, 2019. Late last year, RBI wrangled with Mastercard and Visa, unlike any other market in the world, to have transaction processing done exclusively in-country. In 2017, the RBI eliminated acceptance of high-value currencies
This ditty in National Public Radio sets the stage.
- Ever since Genghis Khan used tree bark as legal tender and backed it up by threatening anyone who didn’t use it with death, governments have manipulated paper money to suit their purposes.
- When India abolished its highest-value rupee notes last November, it sought to rein in hoarders of big bills who evade tax. However, the move sucked so much cash out of circulation that it destroyed the wages of millions of Indians who earn in cash, and deprived millions more of access to their money.
India Today reports on the EMV cut-over.
- If you are an old debit or credit card user, chances are you may face difficulty in doing transactions at ATMs, shops or any point-of-sale machines this year. This is because your card lacks a feature mandated by the Reserve Bank of India.
- The Reserve Bank of India has asked all the banks operating in India to dump the old magnetic stripe cards as they are easy to duplicate and can be used in bank frauds. Instead the banks have been asked to use cards with a security chip inside them called EMV or Europay, Mastercard, Visa chip cards.
As did the US Market, with EMV conversion, swipes will go away.
- The RBI has mandated the use of EMV chip cards from January 1, 2019 which is why you may be experiencing difficulty in using your old card in ATMs, shops, or malls currently. Your card has to be upgraded to avoid this inconvenience.
- However, only the ATMs or point of sale machines will be affected by this move. You can still perform functionalities like paying bills, funds transfer and more using online banking or through the official app of your bank.
ATMs first, then POS. Large volumes.
- However, only the ATMs or point of sale machines will be affected by this move. You can still perform functionalities like paying bills, funds transfer and more using online banking or through the official app of your bank.
- BI has decided to dump old magstripe cards because they are less secure than EMV chip cards. The magnetic stripe card stores user data in a static form in the black strip running at the back of it. According to RBI, as on September 30, 2018, there are 990 million debit cards and 42 million credit cards in the country compared to the 847 million debit cards and 36 million credit cards at the start of the year.
RBI is pushing RuPay as a domestic payment scheme, and unevening the playing field for global brands;. What for more in 2019!
Overview by Brian Riley, Director, Credit Advisory Service at Mercator Advisory Group