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You suddenly receive an SMS alert from your bank that a huge amount has been withdrawn from your account, that too from an location abroad. As you frantically start calling your bank to block your debit card, you receive more alerts about withdrawals and in no time, your entire account gets cleaned out.
To minimise such frauds, the Reserve Bank of India has made Personal Identification Number mandatory for debit card transactions. Banks, too, have taken measures such as sending regular alerts to customers, checking with customers if they notice a larger-than-usual transaction, introducing two-layer verification for online transactions, etc.
But, despite all this, frauds do happen.
While most banks allow customers to set usage limits on credit cards, some lenders allow such features on debit cards as well. Axis Bank offers the option to ‘switch on’ or ‘switch off’ a debit card, set limits on ATM transactions and purchases made using the card.
YES Bank recently introduced a similar feature with more options, jointly with MasterCard called YES InControl. This allows cardholders to customise their usage parameters. Using net banking, you can set daily/weekly/monthly spends limits on debit cards. For example, if you set a daily limit of Rs 10,000, your debit card usage will be restricted to that much despite a higher limit. You also have an option to subscribe to intimations only upon the breach of set limit without declining the transaction, for better tracking of spends.
You can also restrict usage of the card according to the time of the day or merchant category. For instance, you can set a usage limit between 8 am and 8 pm. Or you can set a monthly limit of Rs 5,000 for spends at restaurants.
The set limits become active on a real-time basis and can be modified according to your convenience. So, if you are planning to shop for a big-ticket item, say, airline tickets or an electronic gadget, you can modify the limit till your transaction is complete.
“Setting these limits is easy and ensures that customers have complete control of their card,” says Pralay Mondal, senior group president, retail and business banking, at YES Bank.
Customers also get transaction alerts to keep them posted about every transaction through SMS and email.
“YES InControl is a second layer of security for customers, as it is over and above the protection extended by the bank. Thus, depending on the limits set by customer basis their card-usage pattern, they can ensure fraud transactions can be reduced,’’ says Mondal.
Customers can restrict transactions in 13 merchant categories. These include airlines, hotels, petrol pumps, restaurants, utilities, groceries, entertainment, retail shopping, etc. Customers can also restrict transactions among countries. Typically, a stolen card is used to make large purchases, say, at a jewellery store. That is why most banks check with customers in case of such transactions, says Ranjit Punja of CreditMantri.com.
“Those are called ‘runaway’ transactions and that is why the bank calls to make sure the customer is actually making the purchase. A feature to set pre-set daily limits is new and useful from a fraud point of view,’’ he says.
Parents who give debit cards to their children also use pre-set limits from a financial planning point of view to ensure the child does not overspend. Setting a limit is particularly recommended if you are going on a foreign trip. But, it might happen that you see something you want to buy, but are unable to do because of the limit. So, inform your bank earlier to avoid such situations, Punja adds.
What if a fraud occurs despite all precautions taken by customers? Mondal says, “We do not foresee the transactions getting authorised. However, in case fraud happens, customers are offered complimentary insurance fraud covers on their debit card, which covers fraudulent transactions done on the card.”
To minimise such frauds, the Reserve Bank of India has made Personal Identification Number mandatory for debit card transactions. Banks, too, have taken measures such as sending regular alerts to customers, checking with customers if they notice a larger-than-usual transaction, introducing two-layer verification for online transactions, etc.
But, despite all this, frauds do happen.
While most banks allow customers to set usage limits on credit cards, some lenders allow such features on debit cards as well. Axis Bank offers the option to ‘switch on’ or ‘switch off’ a debit card, set limits on ATM transactions and purchases made using the card.
YES Bank recently introduced a similar feature with more options, jointly with MasterCard called YES InControl. This allows cardholders to customise their usage parameters. Using net banking, you can set daily/weekly/monthly spends limits on debit cards. For example, if you set a daily limit of Rs 10,000, your debit card usage will be restricted to that much despite a higher limit. You also have an option to subscribe to intimations only upon the breach of set limit without declining the transaction, for better tracking of spends.
You can also restrict usage of the card according to the time of the day or merchant category. For instance, you can set a usage limit between 8 am and 8 pm. Or you can set a monthly limit of Rs 5,000 for spends at restaurants.
The set limits become active on a real-time basis and can be modified according to your convenience. So, if you are planning to shop for a big-ticket item, say, airline tickets or an electronic gadget, you can modify the limit till your transaction is complete.
“Setting these limits is easy and ensures that customers have complete control of their card,” says Pralay Mondal, senior group president, retail and business banking, at YES Bank.
Customers also get transaction alerts to keep them posted about every transaction through SMS and email.
“YES InControl is a second layer of security for customers, as it is over and above the protection extended by the bank. Thus, depending on the limits set by customer basis their card-usage pattern, they can ensure fraud transactions can be reduced,’’ says Mondal.
Customers can restrict transactions in 13 merchant categories. These include airlines, hotels, petrol pumps, restaurants, utilities, groceries, entertainment, retail shopping, etc. Customers can also restrict transactions among countries. Typically, a stolen card is used to make large purchases, say, at a jewellery store. That is why most banks check with customers in case of such transactions, says Ranjit Punja of CreditMantri.com.
“Those are called ‘runaway’ transactions and that is why the bank calls to make sure the customer is actually making the purchase. A feature to set pre-set daily limits is new and useful from a fraud point of view,’’ he says.
Parents who give debit cards to their children also use pre-set limits from a financial planning point of view to ensure the child does not overspend. Setting a limit is particularly recommended if you are going on a foreign trip. But, it might happen that you see something you want to buy, but are unable to do because of the limit. So, inform your bank earlier to avoid such situations, Punja adds.
What if a fraud occurs despite all precautions taken by customers? Mondal says, “We do not foresee the transactions getting authorised. However, in case fraud happens, customers are offered complimentary insurance fraud covers on their debit card, which covers fraudulent transactions done on the card.”
