RBI Plans New Framework for Authentication of Digital Transactions
IANS 08 February 2024
The Reserve Bank of India (RBI) on Thursday said that it has decided to come out with a new framework for authentication of digital payment transactions and introduce additional norms to enhance the security of the aadhaar enabled payment system (AePS).
Over the years, RBI has prioritised security of digital payments, in particular the requirement of additional factor of authentication (AFA). Although RBI has not prescribed any particular AFA, the payments ecosystem has largely adopted SMS-based 'one time password (OTP). With innovations in technology, alternative authentication mechanisms have emerged in recent years.
“To facilitate the use of such mechanisms for digital security, it is proposed to adopt a principle-based 'Framework for authentication of digital payment transactions'. Instructions in this regard will be issued separately,” RBI said.
To enhance the security of AePS transactions, it is proposed to streamline the on-boarding process, including mandatory due diligence, for AePS touchpoint operators, to be followed by banks. Additional fraud risk management requirements will also be considered. Instructions in this regard shall be issued shortly, RBI said.
AEPS, operated by NPCI (National Payments Corporation of India), enables customers to perform digital payment transactions in assisted mode. In 2023, more than 370mn (million) users undertook AePS transactions, which points to the important role played by AePS in financial inclusion.
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