Will RBI's New Move Secure Global Online Transactions?

RBI proposes additional factor authentication to secure international CNP transactions

- Anil Poste

In a significant move to strengthen the digital payment security framework, the Reserve Bank of India (RBI) has proposed to enable additional factor authentication (AFA) for international card-not-present (CNP) transactions.

The move aims to provide Indians with an additional layer of security when dealing with foreign merchants, ensuring a safety net comparable to domestic transactions, where additional factor authentication is mandatory. RBI will soon issue a draft circular to invite feedback from stakeholders.

What prompted the RBI move? Instances of fraud in international card transactions involve unauthorized charges on foreign websites where minimal authentication is required. This has exposed Indian cardholders to risks, particularly in scenarios where merchants do not verify key details such as CVV numbers or where recurring payments are set up without additional security checks.

Experts said enabling AFA for such transactions will act as a critical safeguard. "By introducing AFA for international card-not-present transactions, the RBI is adding an extra layer of security that can help prevent unauthorized transactions," said Adhil Shetty, chief executive, BankBazaar.com.