Many of us are worried about fraudulent transactions on our credit card or debit cards. And why not? We keep hearing or reading about new and innovative ways of perpetrating card and UPI frauds on unsuspecting account holders. While the fraudsters are usually a step ahead of us and the regulations, a little bit of awareness can help still guard against frauds. Moreover, even if you became a victim, awareness about the rules can reduce the extent of damage.
There are two ways to handle this.
- Avoid frauds. Common sense advice — Do not share card details or net banking details with anyone. Do not share OTPs. You do not need OTP or UPI PIN to receive money but only to transfer money. Do not use credit/debit cards on public or unsafe computers.
- If you are a victim, reduce the impact of fraud. You need to report the fraud quickly. This will reduce your liability. The sooner you report the fraudulent transaction to the bank, the better it is.
- Reducing the Impact of a Credit Card Fraud
- Use PayTM or Amazon Pay? What Is You Liability in a Fraud?
In addition to all the above, RBI came out with a circular to enhance security of card transactions earlier this year. Suggest you go through the circular to know more about your rights. I wrote about the changes in this post. This will help both prevent frauds and reduce the damage in case of a fraud.
What Can You Do Prevent Fraud?
Your bank shall provide you facility (through mobile add or website) to:
- Enable/disable all transactions. If you don’t use your card, then just disable all transactions.
- Lock/unlock domestic or international transactions. If you are not travelling abroad, just disable international transactions on your card.
- You can set daily transaction limits or you can set per transaction limits.
For instance, you can set up a daily transaction limit of Rs 20,000 and per transaction limit of Rs 10,000. In such a case, if the bank receives a transaction request of Rs 11,000, it will be rejected (greater than per transaction limit). OR if your bank receives 3 requests on your credit/debit card in the following order on the same day: Rs. 9,000, Rs. 8,000 and Rs 5,000: The third transaction of Rs. 5,000 will be rejected because the daily limit of Rs 20,000 gets breached with the third transaction.
Not just that, you can set these limits (daily and per transaction) for various types of transaction.
- Point of sale
- Online Transactions
- ATM Transactions
- Contactless transactions
Here is what my credit card issuing bank allows:
- Set daily limits for Point of sale transactions, online transactions and ATM transactions.
- Set per transaction limits for Point of Sale transactions, online transactions, ATM transactions and contactless transactions. The per transaction limits can be set separately for domestic and international transactions. For instance, you can set different online transaction limits for domestic and international transactions.
- Adjust these limits real-time through the mobile app.
How Do You Use This Facility?
Depending on your usage, you can set up limits for various types of transactions.
If you use your card for mostly online transactions, you can simply set your Point of sale transaction limit to zero or to a very nominal amount (say Rs 1,000).
If you do not use your credit/debit card for online transactions, you can block online transactions (set online transaction limit to zero). You can set either the daily online transaction limit or per online transaction limit to zero. Both will serve the same purpose. Many senior citizens use a debit card for ATM withdrawals, and sometimes can be easy prey. You can help them set per transaction limit (for online transactions) to zero. You can set limits for other kind of transactions too.
If you own two credit cards, you can use one card for point-of-sale transactions (and block it for online transactions). You can use the second card for online transactions (and block it for Point of sale transactions).
You don’t have to do it exactly in the manner suggested above, but you get the idea. You can set daily/per transaction limits as per your preference.
Bank Implementation Varies
Please understand your bank may not provide all these features. I checked on the mobile app of the bank, where I hold the savings account (debit card). The app allows users to enable or disable domestic/international transactions. In addition, it allows to set up limits for ATM or POS/e-commerce transactions. There was no bifurcation for POS and e-commerce transactions. A single limit for both types of transactions.
In my opinion, the bank is not implementing the RBI directions properly. Copying excerpt from RBI circular on enhancing security for card transactions.
Additionally, the issuers shall provide to all cardholders — facility to switch on / off and set / modify transaction limits (within the overall card limit, if any, set by the issuer) for all types of transactions – domestic and international, at PoS / ATMs / online transactions / contactless transactions, etc.
Creative interpretation. Game of punctuation, I guess. I need to reach out to the bank for better clarity.
However, my credit card issuing bank did a far better and honest job.
Plan to set up transaction limits for your credit or debit card? Does your bank provide you granular options? Let us know in the comments section.