RBI Proposes New Authentication Methods for Digital Payments | India Business News

Feb 8, 2024

New authentication methods for digital payments:The Reserve Bank of India (RBI) has announced a new way to verify digital payments. instead of just using SMS-based OTPThey are giving a theory-based introduction authentication framework, This change is due to The digital payments landscape is changing need better Security,
“Over the past few years, the Reserve Bank has actively facilitated the introduction of various mechanisms such as Additional Authentication Factors (AFAs) to secure digital payments,” the RBI Governor said in his Monetary Policy Statement address. Although no specific mechanism was specified by the Reserve Bank, SMS-based OTP has become very popular.
Read this also RBI announces offline transactions for digital rupee; Here's what the new CBDC move means
“However, with technological advancements, alternative authentication mechanisms have emerged in recent years. Therefore, to facilitate the adoption of alternative authentication mechanisms to enhance the security of digital payments, it is proposed to establish a principle based framework for authentication of such transactions,” he said.
RBI plans to issue separate detailed instructions outlining the specifics of this principles-based authentication framework.
New way to authenticate online transactions
Currently, when you initiate an online transaction, you receive an OTP on your registered number, which you need to enter within a specified time to authenticate the transaction. Most banks and lenders rely on this SMS-based OTP authentication method for digital payments. However, the central bank is proposing a new framework for authenticating digital transactions.
Read this also Attention loan takers! Now, know the all-inclusive interest cost for your loan, RBI announces new measures for transparency
What is changing?
Instead of mandating the use of OTP for authentication, RBI-regulated entities will have the flexibility to use alternative authentication methods, according to Abhishek Kumar, a SEBI-registered investment advisor quoted by ET. may include Time-Based One Time Password (TOTP) are generated through algorithms or other authentication techniques.

Related Post

Leave a Reply

Your email address will not be published. Required fields are marked *