RBI has stated that punching your debit card pin is now mandatory for buying goods using your debit card while shopping. This rule has come into effect since Dec 1, 2013. The initial deadline for banks to implement this rule was June. However, some of the banks could not stick to this deadline and had asked for an extension till end of November. Through this article, let us understand why RBI has brought about this rule.
What happens after you punch your Pin?
There is a process in place through which your money reaches the destination account. The process has been simplified in the below steps:
Step 1: You Swipe your Card at the POS (Point of Sale) device present at the shopping centre and the merchant inputs the amount.
Step 2: The POS device validates your card based on expiry date, magnetic strip, etc.
Step 3: The merchant asks you to punch your ATM pin.
Step 4: Your bank account will be checked for balance and daily limit by the bank server.
Step 5: The bank server sends a report to the POS device. It can either be ‘Success’ or ‘Failure’.
Step 6: ‘Failure’ gives an error code saying ‘transaction declined’.
Step 7: ‘Success’ gives two printouts of the transaction. One is customer copy, which would be signed by you and given back to the merchant. Other is the merchant copy, which will be retained by him.
Step 8: The amount will reach the bank account of the merchant within 24-48 hours. The internal transactions between banks happen through payment gateways.
What if you do not punch your Pin?
The primary reason for bringing about this rule of compulsory punching of pin at POS terminals is the skimming fraud. There have been multiple frauds of this kind. Fraudsters have used devices such as skimmers, hidden cameras, etc for performing these frauds.
Punching of wrong pin thrice will block your card. If you do not punch your pin at the POS terminal, your card can easily be skimmed for details. It’s not just the card, but your entire financial details may be stolen. Apart from punching the pin, RBI has also suggested other safety measures to banks such as EMV (Europay, MasterCard and Visa) chip on cards, real time fraud monitoring system, limit on transactions, etc.
Measures to protect yourself from Debit Card Frauds
1) Check for damage – Before presenting your debit card for transaction at the POS, check if the device is damaged. If it is, the device could have been used for skimming. You can ask for another device or pay by cash in such cases.
2) Check for hidden camera – It may be difficult to track hidden camera, since these days cameras are being installed in pens, buttons, bags or even the POS device.
3) Cover the keypad while punching the pin – Always try to cover the keypad while punching your debit card pin at ATM’s or POS. Also make sure that you type the pin and not let the merchant type.
4) Report anything unusual to the bank – It’s important not just to avoid using any unusual looking machines but also to report the same to the bank.
Till now, most of the cards issued by banks had magnetic strips. Such magnetic strips are vulnerable to cloning/skimming. Hence, as said before RBI has also suggested EMV chip on the cards. Banks have already begun sending in new card with these chips to their customers. If you did not receive one, recheck with your bank for it. Once you get the new card, activate it immediately.
Do you think there is anything else that banks or customers can do to enhance security against frauds? Share your views with us.