Starting April 29th, all debit cards in the country, which doesn’t have the EMV chip, will stop working. Hence, non-EMV Chip-based debit cards cannot be used for withdrawing cash now, and literally, they will be useless.
What is the point of this rule? Why has RBI made it mandatory for everyone to have only EMV Chip-based debit cards?
RBI Rule For All Debit And Credit Cards
In 2015, RBI had released a notification under 18 read with Section 10(2) of the Payment and Settlement Systems Act, 2007 (Act 51 of 2007), which made it compulsory for all debit and credit card holders to have a chip-based card.
As per the notification, the last date for implementing this rule was December 31st, which was later extended to April 29th, 2019.
Banks Will Replace Your Card
RBI has mandated that every bank should exchange the old debit and credit card with the new chip-based cards, as soon as possible.
Mass SMSes have been circulated, and most of the banks are replacing the existing cards for free.
The old cards are magnetic based cards, which are prone to frauds and cheating, wherein users can lose money. ATM skimming, for example, is a very widely used fraud activity where the information stored in the magnetic stripe is stolen, and then used cloned to create a copy of the card.
With EMV Chip-based cards, these frauds are not possible.
Why EMV Chip Based Debit/Credit Cards?
EMV Chip-based cards is a globally accepted technology created by Europay Mastercard and Visa, (hence, EMV) and is supported by RuPay, American Express, Discover, JCB, Mastercard, UnionPay and Visa.
Three reasons why this is an important step:
Fraudless Transactions: The biggest differentiator between EMV Chip-based cards and magnetic stripe based cards is the storage of information: The EMV Chip cards store their information in the small chip which is embedded into the card.
In order to carry a transaction, the user will have to enter a password as well.
In the magnetic stripe card, the information is stored in the magnetic stripe, which can be easily cloned by skimming devices……Read More>>