How Banks Harass Customers to Resolve Unauthorised Transaction Issues
When it comes to ease of doing business, it is not merely the government and its bureaucracy that adds to hardship and inconvenience. Private banks, which are supposed to be tech savvy and smarter than their public sector counter-parts are no different. 
 
Despite clear rules of the Reserve Bank of India (RBI), innumerable customers faced with misuse of their credit cards are given royal run-around by banks before they agree to reverse these transactions.  Dr Pradnya Saravade, an officer from the Indian Police Service (IPS) cadre, who is additional director general of Maharashtra Police, was recently the victim of an unauthorised transaction on her credit card. She immediately blocked the card and reported the matter to her bank, which as Axis Bank. 
 
Dr Sarvade then discovered how convoluted the system to deal with what ought to be a smooth and tension free process. What she has done is to blog her experience, analyse the root cause of friction and suggested how to improve resolution without needlessly burdening the police. The point to note is that if a senior cop finds the need for filing an FIR (first information report) irksome, imagine how much of a hassle it is for ordinary people who do not even want to visit a police station unless it is absolutely necessary. 
 
 
"I recently had an experience worth narrating regarding my Axis Bank credit card, which I feel gives some insights into 1. The hardships a common banking customer may face when dealing with behemoths like Banks and 2. How, the many customer protection measures a regulator like RBI may require of the Banks, do not get complied with.
 
On 25 may 2020, I was informed by the bank via email, of a transaction done on my credit card from abroad, and the mail further asked me to reply immediately to them if the said transaction was an unauthorised one. I quickly responded to the bank’s email, that the transaction was unauthorised and the amount should not be billed to me and that I have blocked the card (I had done that from the mobile app). The transaction amount was small. Thereafter, the bank’s relationship manager was in touch with me and assured me that the amount will not be billed to me. But I was in for a surprise when I got the credit card statement billing me for this unauthorised amount and an intimation on SMS from the bank after two weeks of the incident, that the above amount has been debited from my account!!
 
I called up the Bank’s senior official whom I knew personally and who was in the know of the earlier correspondence of the unauthorised transaction. Then I get a mail from another Dept of the bank asking me to fill up and send the 1. Axis bank’s Cardholder dispute form 2. Incident Letter addressed to the bank in Hindi or English, and 3. Police complaint/FIR
 
What is irksome, customer unfriendly and needs correction: 1. The bank did not have any standard line in their first transactions monitoring email intimation (of 25/05/2020), which could have informed the customer(me) to fill up their Cardholder Dispute Form if the transaction was an unauthorised one. The said form should have been hyperlinked in a mail of such criticality. Thus, the unsuspecting customer – who was not informed of the follow through process and has lost money for no fault of his/her – is hassled, 2. The bank already had my email intimation from 2 weeks earlier, regarding the unauthorised transaction in response to their then email. Yet they want another Incident Letter from me. Clearly one department of the bank does not know what another department has been doing with the customer. Thus, the customer is hassled, 3. They want me to file a complaint with the police. But what will police do with this complaint which is regarding an unauthorised use of the bank card for a small amount in another country? There will be no FIR – only a stamp of receipt of my complaint in the police station. Why burden the police with this unnecessary step when the amount is small and hassle the customer with this process which anyway has no meaning since the bank is itself already aware of the unauthorised use of the card and has blocked the card because of the same?"
 
Unfortunately, Dr Saravade is not the only customer that is at the receiving end by Axis Bank. A casual look on social media reveals several such cases and "we don’t care" attitude by Axis Bank. 
 
For example, one customer Divya was levied some charges on her credit card now instead of 2019 and the bank is sending her irrelevant replies and links that are not resolving her problem.
 
 
 
One customer Sudhanshu says the replies sent by Axis Bank on Twitter are of no use and his issue remain unresolved.
 
 
Similar experience is shared by one Gaurav with an addition of receiving different statements from different customer care executives. 
 
 
Simren Singh Taak, other customer, calls the ill-treatment from Axis Bank as "Dil se Harassment".
 
 
It is not just individual customers who are venting their feelings against Axis Bank on social media, even small entrepreneurs are sharing their experiences. One Rahul Mangal says, amidst the corona virus (COVID19) pandemic, Axis Bank has stopped liquidity support to his small unit and also terminated their online banking facility.
 
 
If you think only domestic customer are facing issues with Axis Bank then check the experience of Devyandu from the US. Axis Bank's NRI wire facility is active only during 10am to 2pm (IST), which is past midnight to 4am in the US, and thus may not be useful for overseas customers.
 
 
We have asked Axis Bank for their comments or views on the experience put forth by the bank's customers on social media. Till writing this story, we have not received any reply from them. We will incorporate Axis Bank's response as and when we receive it. We have also brought the blog to the attention of the RBI and hope they will finally make the process easier for credit card customers. 
  • Like this story? Get our top stories by email.

    User 

    COMMENTS

    tushar_ld2006

    4 months ago

    Same happened with me and that too with Axis bank credit card.It happened in 2019.Two unauthorized transactions from a foreign country and the hardships after that to report the same to bank and police is truely a frustating experience.I do not had to pay for the unauthorized transactions since the bank took care of it but the crux of the matter is why the lengthy , tiresome and illogical processes to follow?
    Firstly,one has to report to the bank within 72 hours and the bank demands a police complaint copy if the unauthorized transactions are upto a certain limit and a FIR if the these transactions are above a certain limit .The FIR copy has to be submitted to bank within a month otherwise as per the bank's rules the complaint can be rejected.We as a common people do have any control when the police files the FIR?

    ssk.pab

    5 months ago

    I fully agree with Dr Saravade about the hardships faced by common Banking Customer and how Banks do not follow protection measures RBI may want them to adopt. I may also add that even Regulator RBI’s departments like Banking Ombudsman and CEPD do not follow their own procedures as laid out by RBI itself, adding to your misery. I am furnishing below my experience with HDFC Bank and RBI Departments to illustrate my point.
    In Dec 2018 I used HDFC International Debit Card to pay Microsoft in Rupees, for licensing the MS Office Package, while I was in US. In its wisdom, Bank while allowing the spend, charged me additional Rs 71 for the reasons known only to itself. (Even today, I am not told by Bank why they had to impose that debit on my Account, though, this debit has since been reversed) I wrote to the Bank saying this is an unauthorized Debit. Because I called it an unauthorized debit, Bank promptly hot listed my card, without even thinking that they themselves have pocketed this money – denying me my Banking facilities for no fault of mine - leaving me high and dry in foreign land!
    Upon return to India I visited the Branch and they suggested they can arrange for a new Card instead of trying to restore the old one as that could take longer. I also discussed other issues with Branch that I faced while using the card in US. They suggested I write to them letter asking very pertinent questions. I did exactly that and sent this letter by way of an email. That was acknowledged by Branch and they confirmed reply within a week. Three months passed and still no response even after my follow up! Obviously the Branch must have taken the flak from Head Office for entertaining my complaint!!!
    That prompted me to go to Banking Ombudsman(BO).
    I lodged complaint under BOS 2006 Scheme, which among other Complaint Heads, also mentions the DENIAL OF BANKING FACILITY as one of the points for the complaint. Among various documents, I also attached copy of my letter to the Bank in support of my complaint and requested this letter be replied to, in detail.
    After another three months, and after follow up on phone, I received reply from BO office that my complaint had been rejected as it was not falling under BOS 2006!!! I may mention here that when a complaint is rejected under this provision, you have no option to appeal against BO with RBI Appellate authority - you have only one option - go to CIVIL COURT!!!
    How very clever of HDFC Bank and BO to stonewall me completely……..In short what BO was telling me is that DENIAL OF BANKING RIGHT IS NOT COVERED UNDER BOS 2006.!! I can understand HDFC BANK twisting the facts but I can not understand why BO – who should be aware of its own rules and regulations - would do that.
    Looking up RBI website I discovered I have an option of lodging a complaint against working of any RBI department with CEPC and then with CEPD. I did just that and it was in November 2019. CEPD comes under a Chief General Manager and it is his Office that is supposed to investigate a complaint and come to a conclusion. Instead, in response to my complaint LODGED WITH CEPD against BO, I got a letter from BO – titled final confirmation of my complaint rejection – justifying the rejection of my complaint.
    SO HERE YOU ARE, WITHIN RBI, AN AUTHORITY - IN THIS CASE BO - IS ALLOWED TO SIT IN JUDGEMENT OF A CASE WHERE THAT AUTHORITY ITSELF IS AN ACCUSED!
    A Classic example of a Kangaroo Court………..
    I wrote back to CEPD pointing out the above facts and asking for a response from his office-that remains unattended as of now-over four months have elapsed. I understand RBI Officers are working from home during current Lockdown, but still no action on my complaint lodged with a Chief General Manager of RBI.
    That is the working of the Regulator - RBI standing shoulder to shoulder with the Bank to deny me the JUSTICE.




    Sudhir Mankodi

    5 months ago

    And despite all such negative new, not a single comment I see from Axis Bank! This is indicative of the \"customer care\" they have!

    yerramr

    5 months ago

    For the last decade, there are innumerable cases of this nature and the Banking Ombudsman is supposed to provide the resolution. Annual Report of Banking Ombudsman reveals large number of such cases from different public sector banks and private banks. When a system does not work, it is the responsibility of the regulator to provide resolution with specific timelines and penalties in good time and in public glare.
    Bank Branches are supposed to hold Customer Meetings every fortnight as per RBI directive. It is years since I saw such meetings. There will be many issues that can be solved locally. Regional Managers are supposed to ensure holding these meetings. It is one thing to appoint committees and issue instructions and the other thing to ensure that instructions are adhered to.

    REPLY

    kvrao42004

    In Reply to yerramr 5 months ago

    Why banks almost gave up customer meetings? In the few months after RBI' directives in this regard followed by individual banks instructions to branches, meetings were held as per time schedule. As days passed, such meetings were attended by a few customers (less than 5 members). So BMs discontinued the practice. Controlling authorities also kept quiet. That way RBI is known for issuing several directives to banks unmindful of practical implications. It's a big joke in banking industry that let RBI's senior officials man banks for two years and let's see the tamasha. For that matter, banks are managed with or without RBI. So is the case with their head offices!

    lakshmanan.nithin

    5 months ago

    Excellent work team moneylife. If not for your work they would have taken every thing for granted.

    sysman.computer

    5 months ago

    Cash is the king.

    All digital channels can be misused with no problem resolution from banks or issuer company. Have credit cards only for emergency requirements. Almost all banks are same. One shit is saying to other that I am more perfumed.

    RBI has clear guidelines on ZERO LIABILITY OF CUSTOMERS vide notification no DBR.No.Leg.BC./09.07.005/2016-17 dated August 11, 2016. One need to report and take up the matter with DBOD and DBS of RBI. Later one can go to Ombudsman also.

    m.prabhu.shankar

    5 months ago

    Excellent Article

    vkjain1973

    5 months ago

    I am also chasing OBC for a unauthorised transaction in my father's account since a year. He is not tech savvy and never used his ATM cum Debit card for any online purchase. Yet there was a transaction. Bank says you would have received SMS and that you shared, so transaction is proper. But in reality, he did not initiated any transaction, not received any sms and so no question of sharing it with anyone. Upon complaint, bank asked for a fir and a form to be filled. I checked the form and found that as per their own form, FIR is not mandatory. I pointed out this to bank and then bank said OK, no fir, just fill the dispute form, which was done. But still it has not reversed the transaction. Lot of followup, but no luck so far.

    Just check the customer dispute form, if it actually mandates FIR.

    taxruling

    5 months ago

    It is not axis bank only but all banks are on the way.

    hamungel

    5 months ago

    Although all banks are same, one solution is to shift your accounts to some other bank till the other bank ignites its Idiotbanking.

    Makarand Joshi

    5 months ago

    I used credit card for long time & can suggest few points:
    1. Never, ever take credit card of bank where you have bank account.
    2. Never auto debit any Cr card paymnt.
    3 never, ever link any auto pay to Cr card for longer time. You can buy TV & pay Cr card in 3 EMI. BUT don\'t buy insurance policy wth 12 month EMI. Any dispute, means you lose out.

    rckahale

    5 months ago

    As general public, we understand that the take away here is do not have credit card with bank where you have home loan..And Bank where you have come credit card, be ready to pack all your savings and migrate before penalizing charges and harassment calls begin towards you.

    One week back I have come in the crosswinds of Kotak bank credit card. Even PayTM like wallets do better job at safeguarding our assets vs banks and our credit card details. Banks should begin showing list of which all payment gateways and sites have been shared our credit card details...so that we have an option to block them untill future use as needed by us. Subscription, international, national...all. Banks can do it with the mega infrastructure.

    kvrao42004

    5 months ago

    I too had a worst experience with Standard Chartered Bank. It happened two years ago. It was an internal unauthorized online transaction that originated in Mumbai when I was stationed in Bangalore. SCB washed its hands stating since it has been authorised by me over telephone through a two way confirmation process ( the Bank quoted a OTP). The correspondence went on seemlessly for more than 4 months. Even escalation of the issue was of no use. I even filed a FIR with local cyber crime. Finally I complained to RBI Ombudsman. Surprisingly, SCB reversed the entry cooly without even informing me. Please tell me who has the time and patience to follow up such issues. SCB didn't even regret for my horrific experience leave alone compensating for the mental agony.

    umeshs62

    5 months ago

    The biggest issue is ill trained staff. PSU banks have proper training facilities which private banks are lacking in.

    REPLY

    kvrao42004

    In Reply to umeshs62 5 months ago

    Umesh Sir, training etc referred by you doesn't help. The bank should have a policy to act in such matters. While all banks including private have standard operating procedures in such cases, but issues do not get resolved. Empathy is totally lacking. God save bank customers!

    mywopy

    5 months ago

    Videshi banking vs Swadeshi banking. Time to make your choice.

    How To Keep Your Money Safe in a Pandemic
    Even as some of us, in states like Maharashtra, begin the fourth month in lock-down, the rest of the country seems determined to put COVID-19 behind it. This has two significant financial implications for all of us. First, several concessions offered during the lock-down have been rolled back from 1st July. So, it is business as usual. Although things are not yet normal, the minimum balance requirements as well as charges for ATM withdrawals, beyond a threshold, are back. Moreover, financial intermediaries are back to hustling investment opportunities that will fetch them the highest commission but may not be in your best interest. 
     
    Meanwhile, the ordinary saver is battered and anxious about her health in times of COVID and the impact of the economic downturn on her own savings. This makes her a perfect target to hard-selling investment products. 
     
    Savers’ fears are completely understandable. A string of high-profile failures of banks, finance companies, the debacle at Franklin Templeton and the manner in which Tier-1 bonds of Yes Bank were wiped out, have made people jittery. During the lock-down, many non-finance professionals have spent time devouring webinars offering investment advice to improve returns on their savings. Even Standard & Poor’s (S&P’s) poorly drafted headline in a press release led to a wrong interpretation about Axis Bank which was further magnified by social media chatter. 
     
    What should a smart saver do in times like these? Think about Urvashi and follow a ‘take it easy policy’, as in the hit song that broke language barriers! Give yourself time to think, and rethink, before taking decisions because the first focus should be to keep your savings safe from people working overtime to make you part from your money. 
     
    Online Transactions: On 19th April, I wrote “Beware of COVID Scams, Fraud, Profiteering and Corruption”. We saw this play out in a big way over the past two months. On 29th June, the media reported how Dr Sanjaya Baru was duped of Rs24,000 because he tried to buy liquor through an unknown website called ‘La Cave Wines and Spirits’. Since he was a former adviser to prime minister Manmohan Singh and a well-known editor, the police sprang into action and nabbed the culprits at Kaman town in Rajasthan. 
     
    Moneylife Foundation has frequently warned that the simple rule about online shopping is to stick to large, well-known companies. Not every online company is an Amazon or Flipkart, even if it offers similar terms and promises quick delivery and returns. If you want to buy liquor online, there may be safer options like Nature’s Basket which used to be owned by the Godrej group and is now an RP-Sanjeev Goenka group company. 
     
    It is important to remember that fraudsters are very well organised and not everyone gets the quick attention that Dr Baru did. In fact, the scale of phishing attacks can be so huge, that on 22nd June, the government issued public warnings about a ‘large-scale cyber attack’ that would use COVID-19 as a bait and an email ID that was spoofed to look like an official government email ([email protected]). While online shopping and payments are an amazing convenience in a lock-down, there is no alternative to being extremely vigilant.
     
    Financial Products: The first worry people have is about the safety of their banks. Again, the bigger the bank, the safer it is, because it is more likely to be bailed out. Senior citizens and retirees are perturbed at the steady decline in interest on term deposits. At the same time, newer private banks are offering as much as 7% even on savings accounts (conditions attached). Should you risk it? The good news is that deposit insurance for banking deposits has been raised to Rs5 lakh. So you have some room for taking a risk and earning more. If your money is already in a safe place, don't move more than Rs5 lakh until things settle down and there is clarity on which way the economy is headed.
     
    A big hustle in times of COVID is to sell COVID insurance. As Moneylife has pointed out, if you have a good health insurance, it already covers COVID. This is important to remember when a Yes Bank tempts you with a Rs25,000 COVID cover on opening a new bank account (only for those below 60 and only for the first year, but with a higher interest of 7.25% ). 
     
    If you are really faced with COVID infection, a Rs25,000-insurance payout will not be a good substitute for a good health policy offering a cover of at least Rs5 lakh-Rs6 lakh. For those who have no insurance, it may make sense to buy one of the many COVID policies launched by the insurance industry; but pay attention to the waiting period and other conditions. 
     
    This is also the time when savers are urged to move money from fixed deposits (FDs) and mutual funds (MFs). The Franklin fiasco has led to the realisation that ‘mutual funds sahi hai’ is just a slogan, not a guarantee on safety of principal or returns. So choosing the right MF schemes from the hundreds on offer needs expert advice or serious research. 
     
    Similarly, enough fingers have been burnt in the past three years (DHFL, DS Kulkarni, the builder who boasted about his integrity but was raising deposits in multiple firms without regulatory clearance) by investing in bonds and debentures of companies. Here, again, there is value in sticking to the most reputed names or public sector entities. One used to advise savers to study credit ratings; but there is no sanctity to ratings anymore when rating agencies can drop debt instruments or companies from investment grade to default overnight, with absolutely no consequences to themselves. 
     
    You cannot depend on the regulator to protect you. Grievance redress mechanisms rarely work because dubious companies know how to trap savers with hidden clauses or sign-offs. The only safety is in a flight to quality. Only four or five highly reputed housing finance companies and non-banking finance companies fit this category. Most often, higher returns are a red flag.
     
    Way Forward 
    What does one do when faced with a job loss or businesses shut–down, coupled with massive loans that are accumulating interest, when there is no income? The answer is to work at reducing liabilities and finding ways to boost income. 
     
    This is easier said than done; many have, indeed, managed to change track, lower expectations and find ways to keep earning. We have heard of a jeweller who took to selling vegetables, a doctor couple has taken to distribution of COVID protective gear and people offering online tuitions. 
     
    For those who have large outstanding loans, this may also be a time to look at cashing the gold you have squirreled away for a rainy day. Gold prices are at an all-time high and have breached the Rs50,000 mark (for 10gm). This may not be the right time to buy more, but to use it judiciously if you are in deep debt. 
     
    Moneylife Foundation receives many queries from people looking to consolidate multiple loans (credit card outstanding, app loans, car loans, etc) and pay a single EMI (equated monthly instalment). But few lenders offer a bigger loan when the borrower is already struggling to pay. A significant reduction in outstanding may help persuade a lender and your gold can help tide over a crisis. But even distressed borrowers tend to forget this asset or remain emotionally attached to it; even worse, some compound their problem by opting for a gold loan instead of selling to reduce debt. Each person’s financial situation is different; but those who can, must cash in their gold reserves to reduce loans.
     
    Finally, the real estate industry is putting out surveys to show that interest in buying a home has not dampened. Can this be true or is it just a sales pitch disguised as a survey? Only those in very secure jobs or who do not need a home loan should consider buying at this time. All others would be smart to wait until the economy looks better. 
     
    All in all, the best action to safeguard your savings is to focus on reducing liability and playing safe. Now is not the time for risk-taking, especially for non-finance savvy persons.
  • Like this story? Get our top stories by email.

    User 

    COMMENTS

    Premkumar R

    5 months ago

    Sane advice; very interesting observation about home loans: "who do not need a home loan should consider buying at this time. All others would be smart to wait until the economy looks better. "

    hamungel

    5 months ago

    Excellent and Practical Advice.

    Ramesh Popat

    5 months ago

    proper asset allocation is important. good advise may help.
    diversification also useful. only bank fd is not right solution.
    risk is everywhere but we hv to earn much more than the
    actual inflation to prosper.

    sundar_ramang

    5 months ago

    Very useful article and well meaning practical advise from Sucheta Dalal

    m.prabhu.shankar

    5 months ago

    Excellent Article. Thanks a lot Sucheta ji.

    yerramr

    5 months ago

    A good cautionary note. It is difficult to choose options. Going safe would mean be content with what you get from banks - particularly, the safest now are only PSBs who offer the lowest rates on your savings for different tenors. If you want a higher return as senior citizen you should be prepared to park for 5 years. But senior citizens should have flexibility for, they know not how urgently they need liquidity. If you are 75+ even insurance may not help and even if provided, they provide at an unaffordable premium. Do not be greedy for higher return than what banks offer for shorter terms. My suggestion is to keep some money in recurring deposit of two years and the rest in 5-year tenor at higher interest for all the senior citizens. They can also simultaneously opt for interest to regularly to be taken into a RD Account.

    ssk.pab

    5 months ago

    You have said grievance redress mechanism rarely woks since dubious companies know how to trap savers with hidden clauses or sign-offs.
    Well, my personal experience shows even well reputed BANKS know how to keep redress mechanism on their right side - to such an extent that grievance redress authorities also do not look at what wrong these banks have done-either deliberately or without themselves being aware of even the printed rules. The blame lies as much with dubious companies including well reputed banks as with regulating authorities and there is no mechanism to control regulating authorities except to go to the Court. Sad state of affairs in the country.

    jjain782

    5 months ago

    Could you please send me the names of banks which offer reasonable interest rate and safe also

    kpushkar

    5 months ago

    Very good and practical advise👍👍

    How Do Contactless Credit or Debit Cards Work?
    It has been a few years since the Reserve Bank of India (RBI) had allowed financial institutions and merchants to use contactless credit or debit cards for transactions. However, several customers are still apprehensive about using such contactless cards, especially about payment being deducted from their cards for transactions initiated by someone else. 
     
    Let us see how these contactless cards work in practice. While everybody refers these cards as contactless, what they really mean to says is, cards that can be connected through wireless technology. Or simply, there is no need to insert the card in to the machine and then type your personal identification number (PIN) to authenticate the transaction. 
     
    In contactless card payment transaction, all you need to do is to tap your card on the machine for any transactions valued up to Rs2,000, and wait for the green light or beep sound (for acceptance of payment). That’s it. In addition, as per the guidelines issued by the RBI, you or your bank or the card issuer can limit the amount per transaction or the number of transactions per day. 
     
    Contactless card is quite useful for small value transactions. Anywhere you see the contactless symbol at checkout or billing counter, you can simply tap to pay. Many fast food restaurants, petrol pumps, malls, convenience stores, pharmacies, and theatres, among others accept contactless card payments up to Rs2,000. 
     
    However, for transactions of over Rs2,000 you will have to use the chip and PIN system, as per the RBI directions. 
     
    Now let us see the security angle. According to Visa, one of the global payment network services providers, contactless cards are as secure as any other chip card. "They carry the same multiple layers of security, which ensure that you are safe from fraudulent or unauthorised transactions. Contactless cards work when the card is within 4cm of the card reader and the contactless payment terminal can only process one transaction at a time. Because your contactless card does not leave your hand during the transaction, you remain in control of your card at all times," it says.
     
    Many customers who are not aware of this aspect feel that someone can misuse their contactless card and deduct money for transactions not initiated by them. However, this fear is misplaced. As Visa has pointed out, the card remains in the hand of the customer and this system works only when this card is within 4cm to 6cm from the machine. In addition, the cashier at the billing counter will have to put in the amount in the terminal to activate the reader before the card can be tapped. 
     
    One thing should be clear here. The contactless card has a built-in antenna that responds to the reader signals emitted by the reading machine and then transmits encrypted signal back to the reading machine through radio waves. So the wallet, which has the contactless card, needs to be placed within 4cm-6cm to complete the transaction. This means you do not need to take out the card and tap it on the reading machine physically. 
     
    Also remember, there is no battery in the contactless card so you cannot turn it off.
     
     
    Having said that, if you have more than one contactless card, then in such cases, you will have to physically tap the reader with the card. Otherwise, in such case, payment would be deducted from the card that is closer to the reading machine. 
     
    In addition, the RBI has issued guidelines for banks and card issuer companies on providing a token that can be used to perform card transactions in contactless mode at point of sale (POS) terminals, or quick response (QR) code payments. The 'token' refers to replacement of actual card details like primary account number (PAN) with a unique alternate code, which would be unique for a combination of card, token requestor and identified device. 
     
    These tokens can be used for mobile PoS transactions, in-app purchases or online shopping. Talking about benefits of tokenisation, MasterCard says, “Tokenisation reduces fraud related to digital payments by making transactions more secure by including a dynamic component with each transaction. It takes the security of a physical EuroPay, MasterCard and Visa (EMV) chip and applies it to non-card environments including proximity and internet payments.”
  • Like this story? Get our top stories by email.

    User 

    COMMENTS

    samintl

    5 months ago

    The contactless card may be a point of convenience but is greatly susceptible to misuse. Lot of complaints are received by us when the card gets lost and it is easiest to use as no pin is required. This card should be banned. The previous version of CHIP card should be used as one feels some safe due to punching of pin.

    Mohan Sivanand

    1 year ago

    One point this otherwise informative article ignores is loss of card and subsequent misuse for transactions under ₹2000, maybe multiple times. Often, people who lose a card are not aware they lost it for days till they may need the card again. If there's a compulsory PIN it seems so much safer. Another thing I noticed is that even our credit cards that require a PIN here work without the PIN in France. That's reduced security I never wanted.

    REPLY

    Yogesh Sapkale

    In Reply to Mohan Sivanand 1 year ago

    Thanks for your comment, Sir.

    Unfortunately, there also is an issue of security with PIN. As every security expert keep saying PIN numbers must be changed periodically. But since the option is only in four-digit, making strong PINs is out of question for several users. During my financial literacy workshops, I found some of the attendees even writing PIN on the ATM card covers!

    In January 2017, a friend of mine lost about Rs80,000 in minutes when somebody withdrew this sum from an ATM. The ATM card and its PIN were in my friend's possession. It took him almost 10 months and numerous calls, emails and letters to the bank, filing a complaint with the police and, finally, help from Moneylife Foundation, to retrieve the amount.

    Point is nothing is really secure. Use of EMV chip and PIN offer some kind of protection. However, this is also prone to frauds. When people use their card on infected switches or ATMs, there is a high probability that their data will be compromised, which was observed in the 2016 case where over 30 lakh ATM cards issued by prominent banks were found compromised.

    In addition, contactless card is just one of the options provided by the card issuers. Whether to use it or not is entirely up to the customer. Having said, if the customer is not comfortable using contactless card, s/he can always use the swipe and PIN method for payments everywhere.

    For the France scenario, I would suggest you to contact card issuer in India to check the option for mandatory PIN & OTP.

    Vinay Chaudhari

    In Reply to Yogesh Sapkale 1 year ago

    Customer choice in use of contact less card is an illusion. For example, ICICI bank and Citi bank now issues only contact-less cards in certain categories. If you ask for non contact-less card, you will be told that this is strategic decision and either you accept contact less card or don't take it. Further, if you ask to reduce the Rs 2000 limit for contact-less transaction or ask to disable the contact-less feature then surprise, its not possible. I have fought hard with ICICI bank but in vain. In fact, I have even written to RBI ombudsman pointing out that banks should provide way to reduce transaction limit as warranted by its own circular on contact-less card but it has rejected the same on technical grounds.

    Yogesh Sapkale

    In Reply to Vinay Chaudhari 1 year ago

    Thanks for your comment. As I keep saying, contactless card is just one of the options provided by the card issuers. Whether to use it or not is entirely up to the customer. Having said, if the customer is not comfortable using contactless card, s/he can always use the swipe and PIN method for payments everywhere.

    Point is, nobody is forcing you for either using contactless card or having one. You can get your card changed (there may be some charges for changing the category and cost of card) to EMV Chip card from contactless.

    Ashok N

    In Reply to Yogesh Sapkale 1 year ago

    Yes, nobody is forcing me. But when RBI says there should be provision to reduce the transaction limit and/or number of contactless transactions, why isn't ICICI providing it? Why are contactless cards default option?

    As I said I still use my contactless card, but very careful not to take it out if I intend to go by public transport or to crowded places. There is potential loss of 2000 rs apart from cash.

    Yogesh Sapkale

    In Reply to Ashok N 1 year ago

    Thanks for your comment. No one can really be behind you holding their reader machine near your pocket in a public transport or at a crowded place. The system does not work that way. Also all readers have ID number and are given to merchants after due scrutiny. Contactless card readers are not easily available like the magnetic card skimmers, so nobody will come behind you in public transport or crowded place with it.
    ICICI Bank does provide a lot of options for debit cards and you can chose one that comes with only EMV chip. Do check it out on ICICI Bank site https://www.icicibank.com/Personal-Banki...

    Ashok N

    In Reply to Yogesh Sapkale 1 year ago

    Hello Yogesh ji,
    Thank you patiently replying to all comments. You misunderstood me. By public places or crowded places, I mean wherever chances of pocket getting picked is higher. Always I have been saying the same. There is potential loss when the card is PHYSICALLY lost. This is not the case with emv card.

    I know card cannot read when it is inside pocket.

    Abhijit Kanjilal

    1 year ago

    saves seconds but risk starts if misplaced or stolen. Not a recommended option.

    Arpita Padiyar

    1 year ago

    Most pos don\'t show us the amount typed before flashing the card. Getting refund for wrongly entered amount is difficult. also does bank take liability in case of theft. A thief may flash the card at several places for less than 2k before we come to know. this card is like 2k note.

    REPLY

    Yogesh Sapkale

    In Reply to Arpita Padiyar 1 year ago

    Thanks for your comment. However, every merchant I had done transactions with has told me the bill amount upfront. Several have two displays that show the total amount for the bill. If its not there, then you can file complaint against the merchant with the service provider (bank).

    Ashok N

    1 year ago

    I do use a contact less credit card. But I feel it is less safer since if lose the card, it can be used *without pin* till the time we realize the loss of the card and block it. I definitely don't carry the card when I am travelling by public transport.

    Also though it is said that the banks have to provide for restricting its usage (number of transactions per day, or maximum amount per transaction), I haven't been able to see this provision on ICICI bank site.

    REPLY

    Vinay Chaudhari

    In Reply to Ashok N 1 year ago

    There is no way to reduce transaction limit on contact less card or to disable the feature. I have learned after fighting hard with both ICICI bank and citi bank.

    Arpita Padiyar

    In Reply to Ashok N 1 year ago

    i have kept the card at home not using it unless safe guards are provided. bank may treat 2k as small amount but for common man it is not.

    Kalyanasundaram Srinivasan

    1 year ago

    Contactless card is totally unsafe ,and to make the card transactions safe card issuing company should give an option to the card holder to temporarily pause the contactless transactions of his card. The card holder at his liberty should be able to choose between contactless operations or pin based operations for his contact less card.

    REPLY

    Yogesh Sapkale

    In Reply to Kalyanasundaram Srinivasan 1 year ago

    Thanks for your comment. Kindly understand, nobody is forcing you to get and use a contactless card. It is fully your choice, whether to use it or no. Also at the billing counter, you can ask the person to swipe your card instead of tapping it on to the reader. This way you can insert your PIN to validate the transaction.

    Aditya G

    1 year ago

    This is great! I'm all in favour of convenience, as long as user knows the security aspects & workflow in case of compromise i.e. keep that SOS number in handy!

    Keying the PIN such a hassle, and I need those precious seconds of my life back, if I could, if there was a time machine. I reckon I would have lost at least 3-4 days of my life just keying the PIN after PIN over the last 20 years. Ugh!

    Contactless and wallets are the way to go for the future. Next is Apple/Samsung Pay. This has to go mainstream. I'm surprised why India has not adopted Kenyan model of m-pesa model for making payments over mobile? It seems so seamless. Or maybe we did, and it failed? IDK.

    REPLY

    Yogesh Sapkale

    In Reply to Aditya G 1 year ago

    Thanks Aditya for your comment. For other payment instruments, the issue could be non-existent grievance redressal. There are several cases, where the customer is made to run from pillar to post for payment is made from their account into an e-wallets or mobile wallet. This could be one of the reasons. But as you said, with bigger players with international standards entering into Indian market, things may become better.

    Uday Thakurdesai

    1 year ago

    Just as cash can be pickpocketed, so can the card. In which case, the thief can literally steal the entire balance. The card holder should be given an option to enforce the use of PIN should he want it. Those who are ready to bear the risk can be perfectly comfortable with the existing system. Why enforce it on those who do not want it?

    REPLY

    Yogesh Sapkale

    In Reply to Uday Thakurdesai 1 year ago

    Thanks for your comment. Kindly understand, nobody is forcing you to get and use a contactless card. At the billing counter, you can ask the cashier to swipe/insert your card instead of tapping it on to the contactless reader. This will allow you use your PIN to validate the transaction.

    SURESH NAIR

    1 year ago

    The probability of misuse very much exists! For example if person is keeping his contactless card in his purse which is in his back pocket all the scamster has to do is to approach the person from behind and ensure that the card reader is 4cm from the card! And before you know it, you have scammed for Rs 2000! The same with cards in handbags etc!

    REPLY

    Yogesh Sapkale

    In Reply to SURESH NAIR 1 year ago

    Thanks for your comment. No one can really be behind you holding their reader machine near your pocket. The system does not work that way. Also all readers have ID number and are given to merchants after due scrutiny. Contactless card readers are not easily available like the magnetic card skimmers.
    As far as misuse is concerned, it is the same case with all types of payment instruments. Point is, use contactless card only if you are comfortable for payment transactions of up to Rs2,000. If you are not comfortable, then you can use swipe/insert and PIN method for all transactions.

    Arun Kumar Saha

    In Reply to SURESH NAIR 1 year ago

    This is good point. I think if a contactless card is accompanied with some sort of thumb reader where it force card holder to hold his card physically at the time of tapping, would be a way for improvement

    SANDESH PAWAR

    1 year ago

    What if we loose a card. I think is the biggest factor amongst the consumers.

    REPLY

    Yogesh Sapkale

    In Reply to SANDESH PAWAR 1 year ago

    Thanks for your comment. Your apprehension is applicable to all types of payment instruments, including chip cards or even cash in your wallet. Also as applicable to all other cards, you need to report the loss to the card issuer and block it from further misuse.

    Vivek Sinha

    In Reply to Yogesh Sapkale 1 year ago

    Dear Sir,
    Why the bank has to force someone to use contactless credit card.
    It should be totally choice of the customer. We are paying for the service.
    Here As My case ICICI is forcing me to use contactless credit card or close the card that's not how bank should work.
    What if I lost my card and I am unaware about it.
    If any fraud happen bank takes ages to refund the amount.
    Now a days bank are mostly concerned towards profit Making not the service.

    Ashok N

    In Reply to Yogesh Sapkale 1 year ago

    And till the time we realize the loss of the card and block, it can be misused. This is not the case with Pin based cards.

    Yogesh Sapkale

    In Reply to Ashok N 1 year ago

    Thanks for your comment. You may want to read...

    "ATM, Debit, Credit card frauds: What you need to know and how to protect your money"
    https://www.moneylife.in/article/atm-debit-credit-card-frauds-what-you-need-to-know-and-how-to-protect-your-money/48648.html

    We are listening!

    Solve the equation and enter in the Captcha field.
      Loading...
    Close

    To continue


    Please
    Sign Up or Sign In
    with

    Email
    Close

    To continue


    Please
    Sign Up or Sign In
    with

    Email

    BUY NOW

    online financial advisory
    Pathbreakers
    Pathbreakers 1 & Pathbreakers 2 contain deep insights, unknown facts and captivating events in the life of 51 top achievers, in their own words.
    online financia advisory
    The Scam
    24 Year Of The Scam: The Perennial Bestseller, reads like a Thriller!
    Moneylife Online Magazine
    Fiercely independent and pro-consumer information on personal finance
    financial magazines online
    Stockletters in 4 Flavours
    Outstanding research that beats mutual funds year after year
    financial magazines in india
    MAS: Complete Online Financial Advisory
    (Includes Moneylife Online Magazine)
    FREE: Your Complete Family Record Book
    Keep all the Personal and Financial Details of You & Your Family. In One Place So That`s Its Easy for Anyone to Find Anytime
    We promise not to share your email id with anyone