RBI restricts credit card online transactions to INR

Monday 25 August 2014 13:44 CET | News

Financial institution The Reserve Bank of India (RBI) has introduced a new clause stating that Card-Not-Present (CNP) transactions for purchase of goods and services within the country will have to be done through a bank in India, and the payments must be made in INR.

The move by the RBI might have a negative impact on ecommerce platforms and taxi aggregators such as Google Play, Amazon and Uber, as these companies route credit card transactions through an international payment gateway and circumvent the two-step verification mandated by the RBI.

The bank declared that camouflaging and flouting guidelines on card security was made possible by merchant transactions being acquired by banks located overseas resulting in an outflow of foreign exchange which is in violation of violation of the directives under the Payment and Settlement Systems Act and the Foreign Exchange Management Act, 1999.

The directive will be effective immediately, but existing arrangements if any, will be accorded by end of October 2014 to comply with instructions and avoid any business disruption.

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Keywords: the Reserve Bank of India, INR, card-not-present, India, online payments, ecommerce platforms
Categories: Payments & Commerce
Countries: World
This article is part of category

Payments & Commerce