RBI hikes limit for contactless card payments from ₹2,000 to ₹5,000

• The Reserve Bank of India has hiked the limit for contactless payments from ₹2,000 to ₹5,000.
  
• The new limit will be effective from January 1, 2021.
  
• Users will be able to customize their limit up to ₹5,000, and if they want to, they can also disable it altogether.
  
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The Reserve Bank of India has hiked the limit for contactless payments from ₹2,000 to ₹5,000, making it easier to quickly make purchases by tapping debit and credit cards at merchant outlets.

The new limit was revealed by RBI Governor Shaktikanta Das during the announcement of decisions made by the Monetary Policy Committee.

The new limit of ₹5,000 will be effective from January 1, 2021. However, as is the case right now, the new limit will be at the discretion of the user. Users can customize their limits up to ₹5,000, or altogether disable contactless payments.

What are contactless payments?

As the name signifies, contactless payments enable you to make payments at payment terminals without swiping your debit or credit card. You don’t have to enter your PIN either.

To make contactless payments, all you have to do is wave the card near the contactless point on the payment terminal. The authentication is done via Near Field Communication (NFC) technology and once authorised, the payment is made.

The limit enhancement of contactless payments comes at a time when Visa and MasterCard – the two largest payment processing networks in the world – have been promoting contactless payments as one of the ways to avoid contact during the coronavirus pandemic.

The RBI has also announced that the Real Time Gross Settlement (RTGS) system will go live 24x7 in the next few days.

RTGS is usually meant for making high-value payments. The minimum limit is ₹2 lakh and there is no maximum cap.

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