‘Processing MOTO Transactions on POS Terminals is to stop, as of 1st January, 2011’ ~ Reserve Bank of India. The policy change notification is the latest credit card security measure issued by the Reserve Bank of India (RBI).
RBI’s purpose of issuing this notification is to tighten the controls on credit card operations, keeping in mind the safety of the cardholder. This policy change while great for cardholders will have an adverse impact on the hospitality industry (a significant percentage of hoteliers secure reservations by collecting guest card information) as well as any merchant that uses a ‘credit card guarantee’ method to operate.
In the ‘credit card guarantee’ method, merchants collect the customer’s credit card details to confirm the sale of the product or service without requiring them to pay an advance or charging the card. The card information is only used in case of a cancellation, wherein, the merchant charges the card in the absence of the cardholder. From 1st January, 2011 this method of operating will become obsolete and any merchant that has not abated their business to weather this policy change will experience a loss in revenue.
The situation is not as dire as it could be; there are alternative operating methods you can adopt easily and without any fanfare. If you are not already online, you can add an ‘Online’ component to your business and allow customers to purchase for any product or service they want directly online and pay in real time. You could also adopt a ‘Telephonic’ business operating method. This allows you to maintain a near identical business to the ‘credit card guarantee’ method; the only difference is that you secure the sale by collecting a payment through a secure interactive voice payment processing solution.
Sign up for CCAvenue, the Online Payment Gateway solution and/or CCAvenue PhonePay, the Interactive Voice Payment Processing solution are operate past January 1st, 2011 without any losses in revenue.
P.S. CCAvenue PhonePay comes free of cost to you if you register for CCAvenue online payment gateway only an additional per transaction charge of 0.5% + Service Tax over and above the credit card and cash card transaction charges, applicable for your CCAvenue® account.