The RBI on Friday announced a new move that will encourage the adoption of safer methods of cash withdrawal. This new method will not involve the use of credit or debit cards. It is a multi-pronged approach by the central bank. Firstly, it will reduce the chances of card skimming as well as the convenience of making withdrawals using a smartphone.
RBI Deputy Governor Rabi Shankar said in a statement, “We are introducing card-less cash withdrawal to avoid card skimming; it is proposed to introduce authentication through UPI. This can be used at any bank’s ATMs, third-party ATMs, etc. Withdrawals can be done from Party ATMs or White Label ATMs. We are working on the system changes and instructions.”
Credit and debit card usage will not change much despite the introduction of cashless withdrawals. Users will still be able to withdraw money using their card. They will continue to work in restaurants and shops for payment. Due to the lack of UPI ecosystem overseas, debit cards and credit cards will be relevant in making payments outside the country.
RBI Governor Shaktikanta Das said, “We will not stop issuing credit/debit cards, as they have many other facilities; they are not used only for cash withdrawal, they are used in any restaurant, shop or in a foreign country.” Payment can be made for. Hence credit and debit cards will continue.”
Benefits of the new cardless cash withdrawal
Convenience: Cardless cash withdrawal will reduce the dependency on carrying debit or credit cards. All you need is a smartphone with a registered mobile number and a UPI ID.
Security: RBI has confirmed that the card skimming risk will be reduced with the implementation of this new scheme. Users will not have to worry about their ATM card being skimmed and cloned. Earlier, banks turned to chip-based ATM cards to provide protection against skimming.
How will the new method work?
To withdraw cash without a card, you will need a UPI ID, the transaction will be authenticated through UPI.
- After entering the ATM, you need to select the “Cashless Withdrawal” option on the screen.
After this, a QR code will appear on the ATM screen, which has to be scanned in the UPI app.
Then the user will enter the UPI PIN and the cash will be withdrawn from the ATM machine
Note: This cardless cash withdrawal method is already available with some banks like ICICI and SBI. However, it will be rolled out to other banks as well and will work with third party ATMs as well.
RBI introduces new way to withdraw cash from any ATM without debit, credit card first appeared on BGR India.