Some Indian banks are bypassing the use of personal identification number (PIN) at credit card swipe machines, blaming merchants for not updating their machines.
The practise has resulted in cardholders continuing to make payments with a signature at some outlets. This makes banks responsible for any fraud in the transaction.
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A bank official was quoted by Times of India as saying that in several places merchants have not yet managed to put in place the infrastructure necessary to facilitate PIN authorisation.
"In many busy outlets, merchants are finding that PIN authorisation slows down the queue as many customers do not remember their number. To ensure that business is not affected, banks have bypassed the requirement of PIN in some machines," bank official added.
Recently, Reserve Bank of India had made it mandatory for all transactions to be authorised only by punching the PIN.
A senior banker said the credit card industry is still grappling with the slew of regulatory changes that were introduced in 2013.
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By GlobalData"Besides making ‘chip and pin’ mandatory, RBI has asked banks to ensure that all new POS machines have the capability of authorising transaction using biometrics," the banker added.
