With India’s digital payments ecosystem booming, security and user experience have become top priorities. To address rising cyber threats and ensure smoother transactions, regulators have rolled out new digital payment authentication rules. These changes affect everything from UPI payments to credit/debit card transactions.
What Are the New Authentication Rules?
The updated guidelines focus on:
Stronger Two-Factor Authentication (2FA): Mandatory for high-value online transactions.
Tokenisation & Card-on-File Security: Merchants can no longer store your card details directly; tokenisation ensures encrypted transactions.
Risk-Based Authentication: Transactions are evaluated in real time, with additional verification only when flagged as risky.
Unified Payments Interface (UPI) Enhancements: Faster approvals for recurring mandates and improved fraud detection.
Key Changes for Users
Simplified Low-Value Transactions – Small-value UPI or wallet payments may skip OTP but use biometric or app-based verification.
Greater Control Over Mandates – Users can approve, pause, or cancel recurring payments within their banking app.
Real-Time Alerts – Enhanced notifications for every debit or suspicious attempt.
Dynamic OTPs & Biometrics – Face ID, fingerprints, and voice verification for select transactions.
Impact on Businesses and Merchants
Merchants must update payment gateways to comply with tokenisation.
Greater focus on customer education about new authentication steps.
Potential drop in failed transactions thanks to smoother verification flows.
Why These Rules Matter
Security First: Protects customers from fraud and phishing.
Global Standards: Aligns India’s digital payment ecosystem with international best practices.
Faster Transactions: Balances safety with convenience to avoid transaction drop-offs.
How to Prepare as a User
Update Apps: Make sure your UPI, wallet, and banking apps are up to date.
Enable Biometrics: Use fingerprint or face ID for faster, safer logins.
Check Notifications: Always verify payment alerts to spot unauthorised activity.
Stay Informed: Follow your bank or RBI updates for new authentication features.
Conclusion
India’s new digital payment authentication rules signal a major step toward secure, seamless, and user-friendly online transactions. By staying updated and using built-in safety features like biometrics and tokenisation, users and merchants alike can benefit from a safer digital payments ecosystem.
FAQs
Q1: Why did India introduce new digital payment authentication rules?
To improve security, reduce fraud, and align with global payment standards.
Q2: Will small-value UPI payments still need OTP?
Not always. Low-value transactions may use biometrics or app PIN instead.
Q3: How does tokenisation protect me?
It replaces your card details with an encrypted “token”, reducing the risk of data leaks.
Q4: Do merchants need to make changes?
Yes, they must upgrade payment systems to comply with the new rules.
Q5: Are these rules already in effect?
Implementation has begun in phases in 2025, with most banks and apps already onboard.
Published on : 25th September
Published by : SMITA
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