Mumbai: The Reserve Bank of India (RBI) has announced plans to introduce a fresh framework for authenticating digital payment transactions, coupled with enhanced norms to fortify the security of the Aadhaar Enabled Payment System (AePS). Emphasizing a longstanding commitment to digital payment security, the RBI aims to streamline authentication methods, moving beyond the conventional SMS-based One Time Password (OTP) approach.
The upcoming “Framework for Authentication of Digital Payment Transactions” is set to adopt a principle-based approach, accommodating evolving technology and alternative authentication mechanisms. While the RBI has not specified a particular Additional Factor of Authentication (AFA), it seeks to leverage innovations in digital security. Specific instructions detailing the framework will be issued separately.
Furthermore, the RBI addresses the need to bolster the security of AePS transactions. Proposing a refined onboarding process for AePS touchpoint operators, including mandatory due diligence, the RBI underscores the significance of additional fraud risk management requirements. Detailed instructions on these measures are expected to be released shortly.
Aadhaar Enabled Payment System, overseen by the National Payments Corporation of India (NPCI), has played a pivotal role in financial inclusion, enabling over 37 crore users to engage in AePS transactions in 2023. The RBI’s initiatives aim to align digital payment systems with the evolving landscape of cybersecurity, ensuring a robust and secure financial ecosystem.
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