Cashless = Unsecured?

India lacks laws to protect consumers if they lose money during digital transactions while its cyber security stands on shaky grounds.

- Sidharth Shekhar

Prime Minister Narendra Modi’s latest war on black money by going cashless is in full swing while we still find ourselves miserably under equipped to tackle a looming threat to India’s cyber security with the rise of a digital economy.

India lacks laws to protect consumers if they lose money during digital transactions while its cyber security stands on shaky grounds.

Post demonetization, India has witnessed an unprecedented increase in digital transactions but measures to ensure the underlying cyber security parameters for digital payments are still kept largely under the ambit of the Information Technology (IT) Act. This is a major cause of concern as we don’t have any dedicated laws on digital payments and it’s very important to remove doubts and clarifications pertaining to legal efficacies and legal validity of digital payments if we really want the nation to move towards a stable and secure digital economy.

Digital wallets fall under the category of non-banking financial corporation’s (NBFCs). This excludes them from the ambit of any of RBI’s governing laws. For fin-tech companies in India today, security compliance falls under Section 43 A of the IT Act.