The Reserve Bank of India (RBI) on Friday, announced its plans to introduce Additional Factor of Authentication (AFA) for cross-border "Card Not Present" (CNP) transactions to enhance the security of online payments.
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This will bring international digital transactions made using Indian-issued cards under the same security standards that have been applied to domestic transactions, according to a Business Standard report.
HT cannot independently verify this information.
As of now, an extra layer of verification like through a One-Time Password (OTP) or biometric authentication exists for domestic transactions which reduces fraud when making online payments.
However, this didn't apply to international transactions till now. Thus, the RBI's newly proposed move plugs this gap.
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Customers can also make international purchases more confidently online since their transactions are safeguarded.
{{/usCountry}}Customers can also make international purchases more confidently online since their transactions are safeguarded.
{{/usCountry}}This comes when online shopping and digital payments have seen a massive surge in India, with shoppers also increasingly buying from international retailers.
This increases the risk of fraud as well. As a result, the RBI has decided to extend AFA to cross-border Card Not Present (CNP) transactions, where a physical card is not used, and the transaction takes place over the internet, according to the report.
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When Indian cardholders make purchases using their cards from international sellers online, they have to verify the transaction using an OTP sent to their registered mobile number or through biometric authentication, which ensures that the person making the purchase is indeed the cardholder.