NEW DELHI: The RBI allowing a higher contactless transaction limit of Rs 5,000 against Rs 2,000 currently will drive digital payments further in the country and shows the central bank&’s commitment to promote a less-cash economy, industry players said on Friday. The Reserve Bank at its bi-monthly monetary policy proposed to enhance the contactless card transaction limit from Rs 2,000 to Rs 5,000 from January 1 in order to further the adoption of digital payments in a safe
and secure manner.
“This is a welcome step by the RBI to increase transactions and e-mandate limit. The increased limit will also help to boost the average value of the transaction and push the adoption of digital payments. This step reaffirms the commitment of the country to become a less-cash economy” said Dilip Asbe – MD & CEO, National Payments Corporation of India (NPCI).
The move will also help customers to on-board into BHIM UPI for performing easy and convenient P2P and P2M transactions, The RBI said it will issue operational instructions on this separately.
“Enhancing limit of contactless card transactions will drive adoption of digital payments. Consumer convenience and benefits are driving payments behaviour. Contactless payments have gained traction from consumers, issuers and merchants as a fast, easy and secure way to transact” said Srini Krish, President, Fiserv Global Services.
He said this technology will continue to improve digital usage as it offers better
engagement, improving customer experience and loyalty.
Mswipe Founder and CEO Manish Patel said the RBI&’s move of increasing the limit
to Rs 5,000 will unlock the true potential of contactless payments and allow SMEs
to accept digital payments for larger ticket size transactions.
“Be it a monthly kirana bill, spa service or a course fee, the spectrum of products and service that can be paid through contactless payments will definitely expand with this new move” he said.
At Mswipe, contactless payments have spiralled from 13 per cent of total transactions in January 2020 to 30 per cent of total transactions in November 2020, he added. Industry body Assocham President Niranjan Hiranandani welcomed the announcements of increasing the limit for contactless card transactions and making the RTGS system operational round the clock.
“The decision to enhance the upper limit on contactless card payments from Rs 2,000 to Rs 5,000 is progressive and will increase customer convenience, especially in these pandemic times when social distancing and staying contactless is crucial. This should also further boost digital payments, which would help the overall financial ecosystem” said Naveen Kukreja – CEO – Co-founder,
As of NCPI further said that the enhancement in contactless transaction limit will help RuPay cardholders to make secured payments. Also, this will be a major boost to the users of recently launched UPI AutoPay functionality for the customers to execute their high ticket recurring payments like utility bills, investments, two-wheeler EMIs, consumer durable EMIs etc
seamlessly, he said.
The RBI said that contactless card transactions and e-mandates on cards (and UPI) for recurring transactions have enhanced customer convenience in general while benefitting from increased use of technology. These are also well-suited to make payments in a safe and secure manner,
especially during the current pandemic, RBI said.