As a part of its bi-monetary policy announcement, the Reserve Bank of India (RBI) has proposed to increase the limit for contactless card transactions to Rs 5,000 from Rs 2,000 per transaction from January 1, 2021.
According to the RBI’s statement on developmental and regulatory policies, contactless card transactions and e-mandates on card (and UPI) for recurring transactions have enhanced customer convenience in general while benefitting from increased use of technology. These are also well-suited to make payments in a safe and secure manner, especially during the current pandemic. The recent instructions on disablement of contactless feature on cards and empowering customers to control the limits on their cards have also brought in added safety for users. To further the adoption of digital payments in a safe and secure manner, it is proposed to enhance, at the discretion of the user, the limits for contactless card transactions and e-mandates for recurring transactions through cards (and UPI) from Rs 2,000 to Rs 5,000 from January 1, 2021. Operational instructions will be issued separately.
The National Payments Corporation of India (NPCI) has hailed this announcement. In a statement, Dilip Asbe, MD and CEO, NPCI, said “This is a welcome step by RBI to increase transactions and e-mandate limit. The increased limit will also help to boost the average value of transactions and push the adoption of digital payments.”
The announcement will help RuPay cardholders to make secured contactless transactions of up to Rs 5,000 on the go thereby facilitating them with a hassle-free transaction process. Similarly, it will give a boost to the users of recently launched UPI AutoPay functionality for the customers to execute their high-ticket recurring payments like utility bills, investments, two-wheeler EMIs, consumer durable EMIs, etc. seamlessly. The move will also help customers to on-board into BHIM UPI for performing easy and convenient P2P and P2M transactions.
The NPCI continues to play a pivotal role in driving the digital India mission through constant innovation, spreading awareness and deploying robust technology and infrastructure for seamless, secure and convenient payment experience, according to Asbe.