In an effort to curb fraudulent use of credit cards, cardholders may be asked to furnish proof of identity while making big-sum purchases.
The move has been encouraged by banks issuing credit cards and associated merchants, like Visa Inc., MasterCard Worldwide to check deceptive use of credit cards.
Indicating the loss burden due to fraudulent transactions, a banking official said, “The fraud to sales ratio in India is at 0.12 which means of every Rs100 spent 12 paise is lost,” said the senior official from a payments processing company quoted in the first instance.
Hit hard by the mounting losses due to increasing number of credit card frauds, most banks have asked merchants to ask for proof of identity for verification when a customer makes a high-value purchase using a credit card.
Praveen Bansal, deputy general manager, transaction banking department, Union Bank of India, said, “written to all our credit and debit card holders to register their mobile phone numbers with the bank. For transactions over Rs500 on credit or debit cards, we send an SMS to the customer giving details of the transactions”.
ICICI Bank the largest credit card issuer in the country with a base of around 8.5 million has asked its customers for cooperation, informing them they might be required to furnish their ID for verification, when making high-value purchases using bank’ credit card.
Another bank, IDBI Bank has instructed the merchants to ask customer making purchases on credit cards of amount exceeding Rs10,000, to furnish ID proof.
The head of personal banking group, IDBI Bank, C.S. Jain, said, “IDBI Bank debit card holders receive SMS alerts for any transaction over Rs10,000. These are the steps the bank takes to check frauds.”
According to RBI, on May 31, 2009 there were 48.42 million credit cards in use in India, with outstanding amount of Rs. 9,748.31 crores, but the overall credit card business is on downside.
A senior official with Axis Bank, explained - “Fraudsters usually rob cards and make purchases of electronic items and jewellery as they have resale value.”
Axis bank has a base of 600,000 credit card customers and 125,000 point-of-sale (PoS) terminals across the countr
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