Tag: debit card

SBI warns against fraudulent customer care numbers, gives instructions to avoid getting scammed, BFSI News, ET BFSI

Banking & Finance

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If you are a State Bank of India (SBI) account holder, then it is important for you to check the correct customer care number to avoid getting scammed.

“Beware of fraudulent customer care numbers. Please refer to the official website of SBI for correct customer care numbers. Refrain from sharing confidential banking information with anyone,” said the bank via a tweet on its official Twitter handle.

This is not the first time that the bank has issued such advice to its customers. Earlier, there have been instances where customers have been conned by calling the customer care number mentioned on a google search for the bank, on food delivery apps etc.Along with the tweet, the bank has also posted an instructional video online, guiding customers on how they can avoid getting conned.

As per the video, while calling the customer care centre, the account holder should not share personal details i.e. bank account number, debit card details, CVV, One-time password (OTP), ATM PIN etc. The bank also sends SMS to its customers reminding them that SBI never asks for confidential information such as PIN and OTP from customers. Any such calls can be made only by a fraudster. Please do not share personal info.

Further, the customer care numbers should be verified from the bank’s official website before making a call.

If you have received such calls or emails, then such frauds can be reported to the bank by sending an email at report.phishing@sbi.co.in or by calling the cybercrime helpline number.



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Junio ties up with RuPay for debit card for pre-teens, teenagers

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Children-focussed fintech, Junio, has launched a smart multipurpose card for pre-teens and teenagers on the RuPay platform.

The Junio RuPay Card is designed for kids and can function as a debit card for both their online and offline purchases, it said in a statement on Monday.

Kids and parents can sign up on the Junio app, and use virtual Junio smart cards with zero annual charges. In addition, children can enjoy up to seven per cent cashback and other reward benefits on Junio payments.

“The newly launched Junio Smart Card powered by RuPay will allow youngsters to make online and offline payments with ease. We are already seeing increased acceptance of the card across the merchant network given the robustness of the RuPay platform,” said Ankit Gera, Co-Founder, Junio.

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BNPL- A boon or a bane for millennials?, BFSI News, ET BFSI

Personal Finance

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-Anushka SenguptaDebaditya Ghosh, a senior software developer at Deloitte, affirmed that he will not use BNPL again. Yes, the ‘Buy Now Pay Later’ credit option has its benefits, such as no hidden charges, but millennials like Ghosh said they are not able to control their expenditures.

“I don’t think I will use it again in the near future. The reason behind it being the purchase limit set by the e-commerce entity. For Amazon the limit is Rs 7,500-10,000. I purchased a product worth Rs 16,000, and I got tempted by the no interest rate policy, so I opted for the BNPL option. However, this wasn’t necessary and I wasn’t planning to spend the additional Rs 6,000. But temptations are quite high, which in turn makes you overspend. You start using it even for small purchases and, at the end, you are burdened by a lot of debt,” Ghosh said.

BNPL is a short term financing method, which allows one to make purchases and pay it off in instalments, within the given stipulated time period.

For those who are known to spend their earnings lavishly, and have fallen short in making full payment at the time of purchase, BNPL can be a great option, but it can increase their already-fragile financial burden.

“I always prefer buying using debit or credit because I can opt for deferment of high value purchases by staggered payments, when needed,” said Shreyashi Haldar, final year MBA student of NIBM Pune.

However, the less conservative millennials – the ones who are spend thrift – believe that BNPL is better than EMI, because of the 0% interest rate. BNPL companies offer an interest rate of 0-24%, depending on the transaction amount, and give the option of digital KYC.

“I purchased an item using Amazon’s BNPL facility, even though it had the EMI option. For EMI, I was being charged 13-15% interest, but with Amazon’s BNPL option, I could purchase the item at 0% interest,” said Asmita Sengupta, senior analyst at PWC India.

For EMIs, one has to pay a percent of interest, some charges, and some paperwork is also required.

Although millennials are in two minds about which is better – one thing is for sure – they believe that BNPL will not replace EMIs or credit cards, in line with what the industry believes. One of the main reasons for this is because the purchase limit is higher in EMIs, compared with BNPL.

“From what I have noticed, BNPL facility of e-commerce platforms are available for customers on that platform only. For example, I had purchased some items using Flipkart’s BNPL facility, but I could only buy it from Flipkart. But with my EMI card, I do not face this issue,” Haldar said.

BNPL- A boon or a bane for millennials?
Since BNPL is relatively new, BNPL is yet to garner a greater reach, like that of EMI and credit cards. Though millennials seem to be in two minds about this new and emerging credit option, the industry believes that the demand for it will likely rise in the future – especially after its robust performance this festive season.

Also Read : Buy Now Pay Later not just a festive craze, demand likely to rise



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Recurring card payments to be affected as new credit, debit card rules kick in from October 1, BFSI News, ET BFSI

Banking & Finance

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Cardholders might witness standing instructions for the payment of their credit card, crash from next month. Instructions may include the likes of content platforms, edtech firms and online ad payments.
With the deadline less than a week away, some merchants are yet to be in compliance with RBI’s new requirement of additional factor authentication (OTP) for repetitive payments.

As per a TOI report, about 75% banks have set up the technology required to meet RBI’s directive. Although, some banks are still in the wait-and-see mode.

Banks are intimating customers that some transactions may fail.

“Effective October 1, 2021, the bank will not approve any standing instruction (e-mandate on cards for recurring transacions) given at merchant website/app on HDFC Bank credit/debit card, unless it is as per RBI-compliant process,” the banks are already writing to the customers.

Banks are recommending the user to either pay on biller’s website using OTP or use the bill-pay option for utilities.

A dozen banks, according to Razorpay, have put in place the technology to alert the customer a day in advance in the case of repeat payments while providing them with a link to discontinue the mandate, mentions the same TOI report.

This move by RBI can take growth in recurring payment mandates off the charts even though there might be disruptions in the short term, said Shashank Kumar, Razorpay chief technology officer and co-founder.

He adds that this directive caters to two problems. Discontinuing standing instruction to a merchant was a task earlier while some asked for a letter by post asking for the discontinuation.

Moreover, credit cards were mainly used for recurring payments while debit cards weren’t as much in use.

Eventually, international mandates will operate uninterrupted as neither banks nor the RBI has jurisdiction over international billers, even after October 1.

The inclusion of 900 million existing debit cards could increase Indian markets multifold, said Kumar.

RBI has increased consumer confidence by allowing them to stop payments whenever they want, he added.

Online education and entertainment could become interesting, he said, as it increases affordability of this service by allowing them to have a monthly debit model instead of a recover annual fees.

RBI, additionally, has capped debits at Rs 5,000 per month which indicates that billers would need to increase the frequency to enable auto-debit.



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Auto debit instructions won’t work from tomorrow, banks ready new system, BFSI News, ET BFSI

Banking & Finance

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From tomorrow, your standing instructions for bill payments to your bank won’t be honoured, till the bank develops an alternate system.

A huge number of credit and debit card users set auto payment instructions for utility services ranging from electricity and gas and subscription services for music, movies and other media. The new rules may lead to lead to chaos for millions of users.

Dashing messages

Banks are sending communications to customers saying that they will not process the recurring payments and customers will have to make payments directly to merchants.

“Attention! From 1st Oct’21, as per RBI guidelines on e-Mandate on cards, we will decline Non Compliant recurring txn at Merchant Web/App on your Credit/Debit Card. Alternate Solution – Retry regular payment on Merchant Web/App authenticated via OTP or Pay via AutoPay in BillPay on our NetBanking for your Electricity /Water/Gas/ Landline/Postpaid mobile/Broadband/Insurance billers,” said a message to customers by HDFC Bank.

Banks and payment aggregators are rushing to meet the October 1 deadline for implementing a new system for standing instructions for recurring online transactions as RBI may not extend it.

“In compliance with the regulatory requirements, we are currently building a solution to seamlessly manage all your domestic standing instructions for recurring payments. This solution will be available soon for you. Starting October 1, any existing standing instruction for domestic and international recurring transactions on your card account will not be processed. We request you to make these payments directly to the service providers to avoid any interruptions,” American Express said in a recent message to customers.

How does the new system work?

Under the proposed system, as a risk mitigating and customer facilitation measure, the card-issuing bank will have to send a pre-transaction notification to the cardholder, at least 24 hours before the actual charge or debit to the card. While registering e-mandate on the card, the cardholder shall be given the facility to choose a mode among available options (SMS, email, etc.) for receiving the pre-transaction notification from the issuer. On receipt of the pre-transaction notification, the cardholder shall have the facility to opt-out of the particular transaction or the e-mandate. For transactions above Rs 5,000, banks will also be required to send one time passwords to customers.

What is a standing instruction?

A standing instruction is a service offered to customers of a bank, wherein regular transactions that the customer wants to make are processed as a matter of course instead of initiating specific transactions each time.

This service relates to transactions like renewing subscription to OTT platforms, newspapers and magazines, and utility bill payments.

The issue

Large lenders and payment entities including State Bank of India, ICICI, Citi, HDFC, Axis, HSBC, Visa and Mastercard had asked the Reserve Bank of India (RBI) to postpone the deadline for putting in place a new system to alert customers on ‘standing instruction’ transactions.

The banks were asked to set up the system by March 31, 2021.

The lenders also wanted RBI to exclude transactions against pre-existing standing instructions and those with international merchants from the new conditions for e-mandates on cards for recurring transactions.



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How to convert purchase via SBI Debit card into EMI, BFSI News, ET BFSI

Banking & Finance

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If you are a State Bank of India (SBI) debit card holder, then you have the option of making big-ticket purchases via EMI. As per the bank’s press release, “SBI offers EMI facility for its customers using SBI debit card in order to purchase consumer durables from merchant stores by swiping their cards at POS (Point of sale). They can also avail this facility while buying online via e-commerce portals such as Amazon & Flipkart through SBI debit card.”

Eligibility
Before availing the EMI facility, customers must confirm the amount they are eligible to claim. This can be checked by sending SMS from the mobile number that is registered with the bank.

The SMS must be sent in the following format: DCEMI to 567676 from the registered mobile no. with the bank.

Steps for availing EMI facility with SBI debit card
Here’s how SBI debit card holders can avail EMI via debit card.

If the debit card EMI is being availed at merchant store:
a. Swipe SBI Debit Card on POS Machine at merchant store
b. Select > Brand EMI > Bank EMI
c. Enter > Amount > Repayment tenor
d. Enter PIN and press OK after the POS machine has checked the eligibility
e. Loan amount is booked after successful transaction
f. Charge slip containing Terms & Conditions of Loan is printed and the customer has to sign on the same

If the EMI is being availed for purchases made on an e-commerce website:
a. Login on Amazon or Flipkart from the mobile no. registered with the bank
b. Select the required brand, article and proceed for payment
c. Select the Easy EMI option from different payment options that appear and then select SBI
d. The amount is auto fetched, enter the tenor and click on proceed
e. SBI Login page appears, enter the internet banking or Debit Card credentials
f. Loan is booked, terms & conditions (T&C) are displayed, if accepted, the order is booked

Loan amount and interest rate:
As per the bank, customers can avail of the loan ranging from Rs. 8,000 to Rs. 1 lakh at an effective interest rate of 2-year MCLR + 7.50% which is 14.70% currently. The loan is available with flexible tenure options of 6/9/12/18 months.

Other benefits:
As per the bank’s press release, there are several other benefits offered on making an EMI purchase via an SBI debit card. These are as follows:

  • Zero processing fee
  • Zero documentation & instant disbursal
  • No blocking of Savings account balance
  • A Standing Instruction equivalent to the monthly instalment amount will be set up on customers’ savings bank account automatically upon availing this facility.



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Only card networks and issuing banks may get to tokenise data, BFSI News, ET BFSI

Banking & Finance

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Only card-issuing banks and card scheme operators, such as the National Payments Corporation of India, Visa and Mastercard, would be allowed to tokenise customer card data, Reserve Bank of India (RBI) is said to have indicated to the industry in a meeting Monday.

The central bank has clarified to the industry that none of the intermediaries, even licensed payment gateways and acquiring banks, would be allowed to store card data and offer tokenised files to merchants under the upcoming payment aggregator and payment gateway regulatory regime kicking in from 2022, two sources aware of the matter told ET.

Under the new norms, every online merchant processing transactions for customers will only have access to a ‘tokenised’ key linked with the consumer’s cards instead of the entire card file. The meeting saw participation of members from industry pockets such as payments, banking and web-commerce, the sources added.

“The central bank has reiterated its stance that it only sees tokenisation as an alternative solution for merchants aiming to offer a one-click checkout facility to customers,” said a source present at the meeting.

“It has also been made clear that only card networks and issuing banks will be allowed to tokenise files corresponding to customer card details. Payment aggregators and merchants will have to devise systems to avail this tokenised link from their respective banks or networks,” the person added.

Tokenisation is an encryption technology that enables card operators to mask actual details of a debit or credit card by substituting with a secure, unique digital token linked to a customer device.

Only this proxy token can be stored by merchants and aggregators to process payments to offer one-click checkouts. Those merchants without access to tokenised links will have to ask customers to fill in the entire details of their card including the 16-digit number every time they make a payment.

The central bank’s insistence on strict card storage norms is on the back of several recent high-profile cyber attacks such as those on JusPay, Mobikwik, Big Basket, Air India and Upstox.

RBI is said to be firm on its stand on customer security where it doesn’t want entities that are not under its direct supervision to be storing card details of customers on servers.

While payment aggregators will be allowed to store card details for processing of redressals and chargebacks, the new rules will stipulate a fixed time under which this data will have to be deleted.

ET reported last week that industry forums, including the Payments Council of India (PCI), have suggested alternative solutions beyond encryption through tokenisation – such as secure reference on files – to minimise customer inconvenience to the central bank.

RBI didn’t respond to ET’s mailed queries.



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RBI against dropping card data storage clause in new rules, BFSI News, ET BFSI

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The Reserve Bank of India (RBI) has rejected a demand by India’s payment gateways for exemptions on select new regulatory norms that are set to prohibit merchants from storing card details and payment operators from offering one-click checkout service to consumers from January 2022, three sources aware of the matter told ET.

The new Payment Aggregator/Payment Gateways (PA/PG) rules will mandate every online merchant processing transactions for customers to only have access to a ‘tokenised’ key linked with the consumer’s cards instead of the entire card file. While authorised card operators will be allowed to store card details for seamless processing of redressals and chargebacks, the new rules will prohibit the usage of this data even by authorised operators for auto checkouts.

This means millions of card holders – both debit and credit – making payments online in 2022 may have to enter their 16-digit card numbers every time they make a payment online as opposed to just authenticating these transactions through the CVV (card verification value) and the one-time password (OTP) as is the current norm.

“The RBI’s new rules have been framed keeping security of the consumers as paramount,” said an industry official aware of the matter. “The current system, while seamless, is prone to breaches and cyber risks as customer card details are being stored in the servers of merchants not directly under the supervisory purview of the central bank.”

The Payments Council of India (PCI) lobby group has suggested alternative solutions beyond encryption through tokenisation–such as secure reference on file–to minimise customer inconvenience. They argue that as licensed aggregators are storing card data on isolated servers for chargeback references, these may be used for allowing one-click checkouts subject to consumer consent.

PCI has also sought a further extension of the deadline for compliance in its letter to the RBI.

“To allow regulated entities to develop and implement solutions that meet the criteria, as well as to ensure consumers are informed, we request sufficient time to be allowed to ensure the entire card ecosystem is prepared to handle card transactions under new solutions without adverse unintended consequences,” said the letter reviewed by ET.

To be sure, the rules were initially set to be enforced from July 2021. The RBI extended this by six months after the industry lobbied for it.

The RBI didn’t respond to queries.

The gateways say customers will see experience friction in subscription-based services that require storage of card data to bill them on a recurring basis. Without the customer data, merchants will have to ask for the card information in every billing cycle, which will result in business disruption, they say.

“While this directive from the RBI is right in intent, it leads to a blanket prohibition for service provider merchants from storing customers’ financial information, even when the said merchants may have the requisite security norms in place or may intend to have one for the same, thereby affecting smooth flow of online payments,” said Rameesh Kailasam, CEO and president of IndiaTech, an industry grouping of startups.

Earlier in the year, IndiaTech had made representations to both the RBI and the finance ministry to allow merchants with adequate security compliances to handle customer data without encryption to prevent disruption to seamless checkouts. Kailasam said IndiaTech is preparing another representation to reiterate this point to the central bank ahead of the deadline.

“It is important to understand here that from a practicality standpoint, device tokenisation may not work in all use cases, like subscription businesses and payments that are device agnostic,” he said.

ET reported Thursday that at least 30 firms including Tata Group, Amazon, Zomato and PhonePe have applied for PA/PG authorisation under the new RBI rule, which was formally introduced in March 2020. The widespread interest among internet firms to apply for an aggregator licence can also be explained by their intent to convert themselves from merchants to payment processors to ensure reduced friction in payment processing for customers.

“The central bank is firm on its stand to not allow any more extensions as of now as the ecosystem has seen several high-profile breaches, mostly at the end of merchants and unauthorised payment aggregators,” said the chief executive of a payment gateway present at the meeting with RBI representatives earlier this month. This year has seen high-profile cyberattacks such as those on JusPay, Mobikwik, Air India and Upstox.



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Post lifting of embargo, HDFC Bank ready to return with a bang in cards segment

Banking & Finance

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Private sector lender HDFC Bank, which is under an embargo by the Reserve Bank of India for credit card acquisitions and digital launches, is hoping to return with a “bang” and regain its incremental market share in cards.

“We have used the last six month period since December to introspect, reinvigorate and re-engineer for the future. We will use tech and digital to help us continue being dominant in the space and will get back to the market with a bang. We have the entire system ready and charged up,” said Parag Rao, Group Head – Payments, Consumer Finance, Digital Banking and IT, HDFC Bank.

Also read: Standard Life sells ₹6,783 cr worth shares of HDFC Life

He expressed hope that the embargo on the bank would be lifted by the RBI soon and said the lender has been in continuous dialogue with the regulator.

“We have very aggressive plans to get back to the market with a big bang. You will see a significant correction in the incremental marketshare,” Rao told reporters at a virtual press conference.

Laying out future plans for when the embargo will be lifted, he said the bank has a much more wholesome strategy.

“It is not only to regain our (credit cards) number and value market share but also to forge new partnerships, build more scale, introduce newer products and services and continue on our journey of being the dominant payments bank player in the space,” he said.

Also read: HDFC Bank acquires 7.4% stake in Virtuoso Infotech

RBI data reveals that lenders such as ICICI Bank and State Bank of India have seen a sharp rise in acquisition of credit card customers since the embargo on HDFC Bank.

ICICI Bank added over 8.15 lakh new credit card customers between January and April this year.

However, HDFC Bank continues to have the largest credit card customer base with 1.49 crore outstanding credit cards as on April 30, 2021.

Rao said the bank has been using the six month period to work on its technology and digital processes and also has a base of pre-approved customers, who will be offered credit cards when the embargo is lifted.

“Our growth on the liability and asset side has continued. We have acquired a significant number on liability and asset side. Our strategy of 75 per cent to 80 per cent internal customer for card base still continues. We have a large database of customers who have one relationship with the bank. We have pre-approved them, we have primed our channels and have set milestones,” he said.

Also read: Focus is to strengthen internal checks and balances: HDFC Bank MD & CEO

In the interim, HDFC Bank has been working with its existing card customers and engaging them in deeper relationships.

“We saw very good results by refocussing on our customer base. We have a far more engaged portfolio, significant increase in activation,” he said, adding that the lender has also broadened the skills of its sales force and reskilled it.

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Depositors seek end to ATM ‘decline fee’, BFSI News, ET BFSI

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The All India Bank Depositors’ Association of India in their pre-policy meeting with RBI governor Shaktikanta Das have asked for the withdrawal of an “unjust” ‘transaction decline charge’ on debit cards.

Each time a person without adequate balance in his/her account tries to withdraw cash from an ATM or uses debit cards to make a payment, the bank penalises him/her Rs 25 plus GST as ‘transaction decline’ charge. This can be termed as the digital version of a charge for bouncing a cheque.

“Such exorbitant penalty for digitally paying consumers ‘disincentivises’ them, thereby many are moving away from digital payments. This applies more to the marginalised class of depositors who may not always have adequate funds in their accounts,” the association said in its written representation.

The body said that these charges are not only unjust but also against the principle of ‘transaction decline’ as this is not like issuing a cheque to a third-party but like a depositor walking into a branch and trying to draw cash. Also, there is no cost to the card-issuing bank in such transactions.

“The NPCI does not consider it as a transaction and hence no interchange is paid by the card-issuing bank,” the letter said. “Though, we can still understand that as a deterrent, banks charge for cheque bounce, where cheque/ECS returns involve third parties and create distrust in the payment mode. However, declined POS/ATM transactions due to insufficient balances is nowhere on a par with cheque/ECS returns. It does not involve any intent of systemic inconvenience or distrust to a third party,” the bank said.

In its representation to the RBI, the association said that prior to January 2020, SBI was charging Rs 17.7 per non-cash digital transaction for over 12 crore basic savings bank deposit accounts. “SBI has agreed to refund the exorbitant charges only for the period starting January 2020, but not prior to that. As disclosed by SBI, during FY20, SBI collected over Rs 150 crore towards service charges from such accounts,” the association said.

Another wrongful charge highlighted by the association was the one imposed by payment aggregators on consumers for making digital payments on e-commerce websites. While the merchants and the banks claimed that they were not the ones pocketing the charge, they did facilitate these charges. which were against the government mandate.

The association also urged the RBI governor not to cut interest rates as inflation has been high and oil prices were firming up.



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