Source: Mint
Context:
India is moving to position its QR (Quick Response) code-based payment system on the global stage. The Bureau of Indian Standards (BIS) has introduced fresh norms covering biometric authentication, QR code-based payments and digital currency security to reduce fraud risks and enhance interoperability according to two people aware of the development.
BACKGROUND CONCEPT
Understanding the Digital Payment Infrastructure
- The Role of BIS: While RBI regulates the monetary aspect and NPCI manages the operational aspect (UPI network), the Bureau of Indian Standards (BIS) acts as the national standards body. These new norms provide the technical “blueprint” that all banks and fintechs must follow to ensure hardware and software interoperability and security.
- QR Code Vulnerability: Traditional QR codes are “static” or “dynamic” images. Fraudsters often use “QR Phishing” (Quishing), where a malicious QR code is pasted over a legitimate merchant’s code, redirecting payments to a fraudulent account. The new standards mandate encryption and verification to stop this “redirection.”
- Biometric vs. OTP: India is moving from SMS-based One-Time Passwords (OTPs)—which are vulnerable to SIM swapping and phishing—to Biometric Authentication (Fingerprint/Iris/Face). These standards ensure that this sensitive biological data is stored and transmitted without the risk of “spoofing” (using photos or molds to bypass security).
CONCEPT BUILDER
The Three Pillars of the 2026 Framework:
- Biometric Security: Lays down requirements for secure storage and protection against identity manipulation. It ensures the reliability of authentication systems used by financial institutions.
- QR-Code Integrity: Provides guidance on secure QR generation, encryption practices, and safeguards to avoid fake codes and unauthorized transaction processing.
- Digital Currency (CBDC): Outlines cryptographic safeguards and system resilience for the Digital Rupee, ensuring it is safe from cyber threats as it moves out of the pilot phase.
MCQs (EXAM LEVEL)
Q.1) Which of the following statements regarding the new BIS standards for digital payments is/are correct?
- It includes safeguards against “spoofing” in biometric authentication.
- It provides a security framework for Central Bank Digital Currency (CBDC).
- These standards are issued directly by the National Payments Corporation of India (NPCI).
[1] 1 only
[2] 1 and 2 only
[3] 2 and 3 only
[4] 1, 2, and 3
Q.2) In the context of digital payments, what does “payment redirection” through QR codes refer to?
[1] Sending a payment from a bank account to a digital wallet.
[2] Routing a transaction through an international server.
[3] Fraudulently diverting funds to an unauthorized account via a fake QR scan.
[4] Automatically investing spare change from a transaction into stocks.
Q.3) As of early 2026, which of the following countries is NOT mentioned as an active or upcoming market for India’s QR-based payment system?
[1] Singapore
[2] France
[3] Japan
[4] USA
Q.4) The “cryptographic safeguards” mentioned in the new BIS norms are primarily intended to protect:
[1] Physical currency notes from counterfeiting.
[2] Digital currency infrastructure from cyber threats.
[3] The physical locations of ATM machines.
[4] The interest rates of short-term crop loans.
Q.5) What is the primary reason for India tightening its digital payment security standards according to the Ministry of Consumer Affairs?
[1] To increase the tax on digital transactions.
[2] To make the Indian UPI system globally acceptable and build trust.
[3] To discourage the use of physical cash entirely.
[4] To reduce the number of banks operating in the country.
[ANSWERS]
Q.1: [2] (Statement 3 is incorrect; BIS issues them, not NPCI)
Q.2: [3]
Q.3: [4]
Q.4: [2]
Q.5: [2]
