The Reserve Bank of India (RBI) has decided to introduce an additional factor of authentication (AFA) for online international transactions, which are done using cards issued in India.
“It is proposed to extend AFA to online international digital payments made to offshore merchants, who are enabled for such authentication,” RBI governor Sanjay Malhotra said while announcing the MPC decisions on February 7. It will provide an additional layer of security in cases where the overseas merchant is enabled for AFA.
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The central bank will issue a draft circular to seek feedback. A similar system for domestic digital payments has enhanced the safety of transactions, which, in turn, has provided confidence to customers to adopt digital payments, the central bank said.
“This requirement, however, is mandatory for domestic transactions only. In order to provide a similar level of safety for online international transactions using cards issued in India, it is proposed to enable AFA for international card not present (online) transactions as well,” the RBI’s statement said.
The RBI after five years, cut the repo rate by 25 basis point to 6.25 percent to give a boost to a slowing economy. The cut comes a week after Budget 2025 cut income-tax rates to offer relief to middle class as concerns grow over slowing consumption.
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