New Rules For Digital Payments From April 1

Mumbai: From April 1, the Reserve Bank of India (RBI) is introducing new rules for digital payments like UPI, credit/debit cards, mobile wallets to make transactions safer. Digital payments will now need two step verification. Till now, you could complete a transaction using just one time password i.e OTP but now you will need an additional step like entering a PIN or password or using fingerprint or face scan. According to experts, device-bound authentication significantly reduces risks of remote fraud, phishing, and SIM-swap attacks making digital transactions safer.

1. Multi-Factor Authentication (MFA): Minimum two factors for every transaction. This could be a combination of (PIN or password), (a registered device or token), and (biometrics like fingerprint or face ID).

2. Dynamic Authentication: Transaction-specific credentials replacing static OTPs

3. Risk-Based Security: Enhanced checks for high-risk activities

4. Issuer Liability: Banks fully accountable for authentication failures. If a fraud happens because of weak security, banks may have to compensate customers.

The new system will also use something called risk-based checks. This means not every transaction will be treated the same way. For example, small payments or transactions from your usual device may be quick and simple. But if you make a large payment or use a new device, you may be asked for extra verification. Businesses and payment apps will also have to update their systems to follow these new rules.

The RBI has indicated that similar authentication requirements will be extended to cross-border transactions, including international card payments. Full implementation for such transactions is expected by October 2026, bringing global payments in line with domestic security standards.