The Reserve Bank of India has increased the limit for Contactless Card transactions from Rs. 2000 to Rs. 5000 starting 1st January 2021. This announcement was part of the RBI’s bi-monetary policy announcement held on December 4 2020 for the hassle-free transaction experience. The decision to increase the limit of transactions by the RBI was to boost the digital payments ecosystem in India.
A Contactless Card is basically a chip card embedded with technology. Contactless cards have a wave-like symbol that looks similar to a wi-fi symbol on the front of your card. These cards are absolutely safe as each time you tap your card, the transaction generates a one-time security code that protects the cardholder’s payment information.
Visa cards issued under this category are known as PayWave cards and MasterCard debit and credit cards are called PayPass cards. Read more at Visa payWave and MasterCard PayPass
In order to carry out a contactless payment, you have to bring your card near a contactless-enabled POS machine and your payment will be done in an instant if the amount is below Rs. 5,000. If the amount exceeds this limit, you have to provide your PIN after swiping your card to prevent fraudulent high-value transactions.