New RBI Rule for online payments
Online Payment Process changed from April 1, RBI make a new rule: Digital payment system has changed in India from April 1. The two-factor authentication(2FA) is applied for all online transaction. In other words, every payment must be verified using at least two different methods.
Under this new rule, users are required to utilize a password, PIN, OTP, biometric authentication, such as a fingerprint or Face ID, or another secure method when making a payment. A key feature of this mandate is that one of these verification methods must be dynamic, that is, unique, for every transaction; this ensures that no specific piece of information is reused, thereby minimizing the risk of fraud.
The RBI has taken this step because, while digital payments have witnessed rapid growth over the past few years, there has been a corresponding rise in instances of online fraud, phishing, and unauthorized transactions. Previously, most systems relied heavily on OTPs; however, OTPs are no longer considered entirely secure, as hackers have devised various methods to intercept them. Consequently, the RBI has now decided to implement a more robust and secure system.
According to the new guidelines, if a transaction results in fraud due to a failure to adhere to security protocols, the responsibility will lie with the bank or the payment company. This means that the customer will not have to bear the loss; instead, the concerned entity will be required to refund the entire amount. This will increase pressure on banks and fintech companies to further enhance the security of their systems.
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