PSD Circular No. 01: Providing permission for Card-Based transaction through Contactless payment service by using NFC technology

Bangladesh Bank Payment Systems Department Bangladesh Bank Head Office Dhaka

PSD Circular No. 01 Date: 18 Magh, 1429 01 February, 2023

Managing Director / Chief Executive Officer All Scheduled Banks/Mobile Financial Service Providers/Payment Service Providers/Payment System Operators operating in Bangladesh

Dear Sir,

Regarding providing permission for Card-Based transaction through Contactless Payment Service using Near Field Communication (NFC) technology.

Due to technological advancements, card-based electronic transactions are increasingly becoming popular among customers. In response to public demand and to ensure customer interests and transaction security, Bangladesh Bank granted permission for Contactless Payment Service using Near Field Communication (NFC) technology via PSD Circular No. 03 dated 12 July 2018. Now, considering the increase in card-based transactions and market needs, and with the aim of encouraging the public to use electronic transactions, the following guidelines are issued to make Contactless transactions on NFC-based cards easier and more effective:

1. Contactless transactions can be conducted using NFC technology on EMVco Compliant debit, credit, and pre-paid cards.

2. The mandatory requirement for PIN/2FA for a single card-based transaction conducted via NFC technology is relaxed up to BDT 5,000.00 (Five Thousand).

3. For transactions involving amounts exceeding BDT 5,000.00 (Five Thousand) using NFC technology, the card must be tapped at the Point of Sale (POS), and the customer must provide their PIN/2FA at that POS to complete the transaction.

4. Information regarding each transaction mentioned in items 2 and 3 must be instantly notified to the customer via SMS.

5. The card issuing bank/institution may determine the maximum limit for a single transaction and the maximum number of daily transactions occurring on a single card, considering their respective risks.

6. Contactless transactions cannot be enabled on an NFC-enabled card issued in favor of a customer without the customer's prior permission. The customer will have the choice to conduct Contactless transactions using their NFC card, and both the Issuer and Acquirer will provide full cooperation in conducting such transactions.

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7. Banks/institutions issuing NFC-enabled cards shall ensure that a clearly visible “Contactless logo” is displayed on all NFC-enabled cards, merchant locations (Merchant Point), and Point of Sale (POS) machines, so that it is easy to distinguish NFC-enabled cards from other cards and to easily identify merchants accepting transactions with such cards. Banks/institutions shall clearly inform customers about the features of NFC-enabled cards, safe usage rules, transaction limits, and associated risks.

8. Banks/institutions must arrange to receive information/complaints from customers through multiple channels (website/e-mail/SMS/Call Centre etc.) regarding lost/stolen NFC-enabled cards. Appropriate action must be taken immediately upon receiving any type of complaint from the customer.

9. The relaxations related to NFC will not apply to ATM and Card Not Present (CNP) transactions.

10. Serial No. 3(d) of PSD Circular No. 03/2018, PSD Circular No. 04/2021, and PSD Circular Letter No. 01/2022 are hereby repealed.

These instructions will come into force immediately.

Yours faithfully,

(Signature) (Md. Motassim Billah) Director (PSD) Phone: 9530174