How to use Credit/Debit card for online payments in India

How to use a Credit/Debit card for online payments in India                                                                                            Card Present (CP) and Card Not Present (CNP) transactions

Online card payments in India: A CP transaction is a card transaction that is carried out through the physical presence of a card at the point of transaction. It is also known as a face-to-face or proximity payment transaction. An example is a transaction carried out at an ATM or a PoS terminal. A CNP transaction does not require the card to be physically presented at the point of transaction. It is also called a remote transaction. An example is an online transaction or a mobile banking transaction using a card.

Protection against Fraudulent usage

RBI has mandated issuers to send alerts for all card transactions so that a cardholder is aware of transactions taking place on her / his card. In order to benefit from it, the cardholders are advised to register for SMS / e-mail alerts. All CP and CNP transactions on cards issued in India are secured with AFA ( Additional Factor of authentication). This AFA can be in any form and few commonly used forms are PIN, dynamic one-time password (OTP), static code, etc. The requirement of AFA is not mandatory for transactions where the outflow of foreign exchange is contemplated. Similarly, in the case of CP transactions (except ATM transactions) using NFC contactless technology, transactions for a maximum value of ₹2,000/- per transaction are allowed to be undertaken without AFA requirement, subject to adherence to EMV standards.

Liabilities of a card issuer in case of fraudulent use of a card by an unauthorized person

In the case of CNP transactions, RBI has mandated providing AFA for domestic transactions. If a transaction has taken place without AFA and the customer has complained that the transaction is not affected by her/him, the issuer bank shall reimburse the loss to the customer.


On the basis of issuance, usage, and payment by the cardholder a card can be:-

a) Debit Card

b) Credit Card

c) Prepaid Card

d) Electronic Card

Descriptions Debit Card Credit Card Prepaid Card Electronic Card
Issuer Banks and cards are linked to a bank account Banks and non-banking institutions Prepaid cards are issued by banks (open) / non-banks (semi-closed) against the value paid in advance by the cardholder. Banks
Usage 1. Cash Withdrawal from ATM


2. Usage at POS terminals & e-commerce (online ) for purchase of goods & services

3. Domestic Fund transfers from one person to another person


1. Cash Withdrawal from ATM


2. Usage at POS terminals & e-commerce (online) for purchase of goods & services

3. Fund Transfer to bank accounts, debit cards, credit cards, prepaid cards within India


The value stored in such cards can be issued in the form of cards or wallets. Prepaid cards can be open or semi-closed in nature. The usage is dependent upon who is the issuer of such prepaid card.


1. Cash Withdrawal (only for Open)

2.Usage at POS terminals & e-commerce (online )

3. Domestic Fund transfers from one person to another.

Electronic cards can be considered as debit cards issued in specific overdraft accounts that are in the nature of personal loans without any specific end-use restrictions. , the instructions relating to debit cards are applicable on such electronic cards as well
International Usage Allowed Allowed Allowed Allowed


Various Modes of using a card at the POS terminal

A card can be swiped (Magnetic-Stripe card), dipped (Chip-based card), or tapped (Contactless Near Field Communication (NFC)Card) at a PoS terminal.

Magnetic Stripe cards EMV Chip & PIN cards Contactless NFC cards
The Magnetic Stripe card stores card data on the magnetic stripe present on the card the data in EMV Chip & PIN cards are stored in a chip on the card (EMV stands for Europay, MasterCard, Visa, the three Organisations that developed and established EMV as the global standard for chip-based credit and debit cards ) Chip cards work with payment acceptance devices that are certified to be compliant with EMV chip-and-PIN standards In a Contactless NFC card, the card is read by keeping the card near the card reader. Contactless transactions are powered by either radio frequency identification (RFID) or near-field communication (NFC) technology. When making a purchase, these radio waves share your bank account, contactless card, or phone app details with the merchant’s payment reader. The transactions are always encrypted
Less Safer Safer Safer

Contactless payment through Mobile Phone

Most smartphones are also equipped with contactless payment technology. Mobile payments are made through a digital wallet app. Download a digital wallet like Apple Pay or Google Pay, and link the card information to the app. At the time when a contactless in-store purchase, just wave the phone over the card reader and wait for the beep.

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