December 7, 2016
The Reserve Bank of India (RBI) has simplified the process of making online credit and debit card payments for low-value transactions. On December 6, 2016, RBI announced that cardholders can skip the OTP-based two-factor authentication process for all card-not-present transactions worth less than Rs.2,000. A card-not-present transaction is a transaction in which the actual debit or credit card is not present.
Currently, cardholders have to provide the card number, its expiry date and security code along with an OTP to authenticate such a transaction. However, going forward the cardholders can choose to skip the OTP authentication process for payments up to Rs.2,000. In order to avail this service, cardholders will need to register by providing their card details. The service will be activated upon successful completion of the one-time registration process. Thereafter, they will not need to provide their card details to avail this service.
A Step In The Right Direction
Visa Checkout and Masterpass (by Mastercard) payment solutions will support this service. It will encourage the people to reduce their dependency on paper currency and go cashless my making payments online with their credit and debit cards. This step taken by the RBI will make ease the process of making digital payments in India. People can instantly complete their transactions without going through the process of receiving an OTP on their phone to authenticate their transactions.
A study conducted by the Boston Consulting Group and Google Inc. indicated that the digital payments market in India will grow exponentially to $500 billion by 2020. The step taken by the RBI to make the two-factor authentication process optional will make it more convenient to make card payments and help India in becoming a digital economy.