Source: News on Air
Context:
The Reserve Bank of India (RBI) has released new guidelines for authentication of digital payment transactions. The move aims to enhance security, strengthen consumer trust, and promote financial inclusion amid rising digital payment volumes and growing fraud concerns.
Key Features of the Guidelines
- Move Beyond SMS OTPs: Traditional SMS-based one-time passwords will no longer be the sole authentication method.
- Advanced Authentication Options:
- Biometrics (fingerprint, face recognition)
- Device identity checks
- Behavioural signals (e.g., transaction patterns, usage behaviour)
- AI-driven risk-based authentication tailored to transaction context
- Technology-Agnostic Approach: Issuers and regulated entities can adopt flexible authentication methods without being limited to a specific technology.
- Enhanced Security for Vulnerable Users: First-time digital users, particularly in semi-urban and rural areas, will benefit from stronger safeguards against fraud.
Implications
- For Consumers: Safer and seamless transactions; reduced risk of phishing and fraud.
- For Payment Issuers: Flexibility to adopt modern authentication methods; enhanced operational resilience.
- For the Digital Ecosystem: Encourages financial inclusion and sets global standards for secure digital payments.
