Contactless payments conform to all security requirements: T. R Ramachandran of Visa

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You can now simply pay up to Rs 5,000 by just waving your card near reader. Having said that, security still remains a major concern for many when it comes to digital payments. T. R Ramachandran, group country manager for India and South Asia at Visa, in an interview with Money9 busts the myths relating to contactless cards.

What is contactless payment and how does it work?

The world of digital payments is moving very fast. The first when I started 30 years ago, you had to take a card and use the zip zap machines to take an imprint of the card. Those charge slips used to take an imprint of the card. From then it moved to push your card into a what is known as an electronic data capture or point of sale machine, and then enter your pin to make the transaction. The world has moved on. All you have to do now is take your card four centimeters near the terminal and tap the card in order to make the payment. And that is what is known as contactless payments, which works on NFC or near field communication radio wave technology to make this payment possible.

Security is still a major concern when it comes to digital payments. How secure are contactless cards?

Let us start from the beginning. Firstly, there is an EMVCo, which is European MasterCard Visa consortium, which is responsible for all new product development and security globally. And when we talk about standards, just like ISO standards, you talk about EMV standards for digital payments. I first want to assure the viewers that contactless payments conform to all requirements of security. Firstly, this is a chip card. You see a small chip embedded on the card, similar to your other debit or credit cards, which you used to dip earlier. The same chip is also there in the contactless card.

When the card goes near the machine and is tapped near the machine, the card transmits information and these information includes the account number, expiring date of the card. And very importantly, transmits a very unique dynamic code that changes for every transaction. This unique code is different than the code, which is encoded on the magnetic stripe on the reverse of your card. So, a criminal attempt to use the intercepted data to manufacture and use a counterfeit card is not possible. This is because there’s a chip and there is a code, which changes every time the customer uses for every  transaction.

If contactless card gets stolen, can the thief simply tap and make the purchase?

Firstly, there is a limit for transactions. The limit used to be Rs 2,000 . It is now Rs 5,000. Second, the RBI said that every customer must turn on contactless. So many banks now have given the mobile app where within the mobile app itself, which you can turn on and turn off. In the mobile app, you can turn on contactless or turn off contactless. That’s very, very important to note, as when your contact card is turned off, it won’t work. Third, as you are aware for every single transaction, the RBI says that banks have to give you an SMS alert or an email alert, or sometimes both. So as soon as they make the transaction, you’ve have seen an alert which comes on your phone. Now, if that transaction is not made by you and you call up the bank, the bank will cancel the card and issue you a fresh card and then take it up with a merchant as a disputed transaction.

Is electronic pickpocketing myth or reality?

Let us understand how the transaction actually works . The first thing the machine is given only to an authorized merchant. So, let us say Starbucks is an authorized merchant. So, the machine will be given in the name of Starbucks and any payment is made to the bank account of Starbucks. Number two, the cashier at Starbucks or, or any other sort of establishment first ask to enter the amount. And then say yes for payment and then get the card near the terminal. It’s not like if I’m walking near the terminal, the money can be automatically get deducted. automatically.  It is known as firing up the terminal or prepping the terminal. Number three, let’s say somebody steals that machine. Right from this restaurant and then comes in and stands near you. Even then the money only goes to that merchant. It doesn’t go to anybody’s bank account. It goes to that restaurant, or that shop or whatever the name of that establishment is. So it’s not like it is going to fraudsters individual. I want to assure customers these transactions are not possible in the real world and it’s completely safe to use. The other thing I heard is if I have two cards in my wallet. The answer is the terminal will throw up saying there are two cards, which one do you want to select you then select one card. And only one of the cards would be debited.

What to do if a person becomes the victim of card fraud?

Earlier you had to cancel the card, but now large bank gives you the option within the mobile banking app of turning off the card. You turn off the card. That means a fraudster even if he or she gets the card will not be able to use it. Number two, the most important thing you have to do is as soon as possible, report the lost or stolen transaction to the call center in the bank or by email or whatever it is because RBI says that once you report it to the bank, your responsibility ceases as a customer and you’re not liable for any charges. But if you, you know, you lost your handbag or lost your wallet and you report it to the bank only after three months. And in the intervening period, there are transactions obviously as a customer, you will be responsible for those transactions. So, I would say first, turn off the card if that facility is available within the app on the card. Number two, as soon as you practically can report it to the financial institution.