RBI Implements Additional Factor Authentication for Secure International Transactions
| Aspects | Details |
|---|---|
| Why in News | RBI introduces Additional Factor Authentication (AFA) for cross-border CNP transactions. |
| Objective | To secure international transactions using Indian-issued cards, making them as safe as domestic transactions. |
| What is AFA? | A multi-step security process requiring more than one verification method (e.g., OTP, biometrics). |
| AFA in Domestic vs. International Transactions | - Domestic: Already mandatory, uses OTP or biometric verification, reducing fraud. - International: Previously lacked AFA, making transactions vulnerable to cyber threats. |
| Need for AFA in International Transactions | - Rising cross-border e-commerce purchases. - Higher fraud risks due to lack of physical verification. - Security gap in international payments. |
| Major Risks in International Transactions | - Fraudulent transactions due to lack of authentication. - Weaker security measures among overseas merchants. - Growing digital payments require enhanced security. |
| RBI's Proposed Changes | - OTP verification for international transactions. - Biometric authentication (fingerprint/facial recognition). |
| Next Steps by RBI | - RBI to issue a draft circular for stakeholder feedback. - Implementation to begin after finalization. - Part of RBI's broader digital security framework. |
| Types of Authentication Factors | 1. Something the user knows - Passwords, PINs. 2. Something the user has - ATM/Debit Cards, Mobile Devices. 3. Something the user is - Biometrics (Fingerprint, Facial Recognition). |
| Impact on Indian Consumers | - Enhanced consumer protection for international transactions. - Increased confidence in global e-commerce purchases. - Reduced fraud in online payments. |