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    Digital payment norms revised, two-factor nod mandatory

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    By Martin Shwenk Leade

    Copyright indiatimes

    Digital payment norms revised, two-factor nod mandatory

    Mumbai: The Reserve Bank of India (RBI) on Thursday issued new rules on authentication for digital payments, giving banks the flexibility to use options such as biometrics, device-based tokens, and passphrases for verifying transactions.However, it has made two-factor authentication (2FA) mandatory for all transactions, with at least one factor being dynamic and unique to that transaction. The rules will come into effect from April 1, 2026, with small-value transactions exempted from 2FA.”The directions focus on encouraging the use of new authentication methods by leveraging technology,” the RBI said in a statement, adding that SMS-based OTPs will continue as an option.The central bank has also asked system providers to make tokenisation services interoperable so they can be used across all applications. As part of their risk management, issuers will be allowed to flag certain transactions for additional checks beyond the minimum 2FA, and can also use DigiLocker for alerts and confirmation on high-risk transactions.The RBI has further directed banks to ensure the security and reliability of these systems before rolling them out. If any transaction takes place without following the new rules, the issuer will have to fully compensate the customer for the loss.Live EventsThe new directions will not apply to cross-border digital payments. However, by October 1, 2026, card issuers must put in place a system to validate non-recurring, cross-border “card-not-present” (CNP) transactions when authentication is requested by an overseas merchant or acquirer.Add as a Reliable and Trusted News Source Add Now!
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    (You can now subscribe to our Economic Times WhatsApp channel)Read More News onDigi Pay Normsdigital paymentsReserve Bank of IndiabiometricsRBIDigiLockerAuthenticationSecurityRisk Management(Catch all the Business News, Breaking News, Budget 2025 Events and Latest News Updates on The Economic Times.) Subscribe to The Economic Times Prime and read the ET ePaper online….moreless

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