Banks are sending messages to every account holder asking them to upgrade their debit and credit cards. You too must have got one such message. But there are chances that you might have ignored the message taking it for a spam. Check the message once again, it is not a spam. This one is a useful message from the bank you have deposited your money with. Now, you need to replace your existing debit and credit cards with new ones, if you have not already done.

But why do you need to take such a pain and replace the debit and credit cards? Legally speaking, the Reserve Bank of India (RBI) has directed the banks to do so. The older debit and credit cards will become useless after December 31.

Banks have to follow the directions of the RBI. This directive from the RBI was necessitated in order protect you from some unscrupulous online predator. Your money must be secured with the banks. It is their responsibility. Debit and credit card piracy has been a major issue, as has been found in online banking fraud cases. The new chip-based cards have been prescribed to keep your money and transaction safe.

The existing debit and credit cards are magnetic stripe-only cards. Their cloning has become a major challenge to those responsible for safe monetary transaction. The new cards are EMV chip-based. EVM stands for Europay, Mastercard, Visa. The old magnetic stripe-only debit and credit cards are to be replaced by EMV chip-based ones by 31 December 2018.

Replacement of existing debit and credit cards with the new EMV chip-based cards is free of cost. Banks bear the cost for new cards. The EMV chip-based debit and credit cards are in use since January 2016. The RBI had made it mandatory for banks to issue only EMV chip-based cards to new customers opening new accounts or applying for new debit or credit cards after 31 January 2016.

The RBI directive is applicable to not only all domestic but also the international debit and credit cards. The existing magnetic stripe-only cards will not be valid beyond December 31-deadline.

EMV chip-based debit and credit cards are more secured compared to magnetic stripe cards. The chip-based cards are also called PIN (Personal Identification Number) cards. These cards use higher standards of data encryption and have improved storage technology.



The magnetic stripe cards have static information stored in the black strip that we see on the back of the card. The customer related information in an EMV card is stored in dynamic format. This change in technology makes card cloning difficult.

The new debit and credit card will require a little change in habit for completing transaction especially through a point of sale (PoS) machine. Transaction through a PoS device can be done using the magnetic stripe cards merely by swiping it while transaction using new chip-based PIN cards will ask for a PIN also. This gives an additional level of security to the user.

Still, online transaction will continue to pose risk if you share card-related sensitive information with an unknown person or someone you don't trust.