Digital Payment Security Controls Direction
The RBI is to introduce digital payment security control directions for regulated entities to improve the security of digital payment channels and also to improve the consumer service. This announcement comes after the central bank temporarily barred the largest private bank, HDFC, from selling new credit cards or launching new digital banking initiatives due to service outages at the bank for over the past two years.
About the Digital Payment Security Control Directions
The Directions propose the setting up of robust governance structure. It includes digital payments, implement common minimum standards of security controls such as mobile banking, internet, card payments. It will bring upon standards on channels such as mobile banking, internet and card payment.
It is to be noted that the digital banking application of SBI was also facing service outrages recently. Therefore, it is important to launch these directions to preserve the stability of the depositors.
The directions will focus on the following
- To monitor minimum standards on common security controls for channels like mobile banking and internet, card payments, etc
- Requirements of robust governance.
Impact on Customers
- There will be no change in how customers use the online payment applications
- Currently, there are no security protocols and authentication methods added to the credit card, debit card or mobile wallet payments. Therefore, the Digital Payment Security Controls Direction will help boost the security in these areas.
Why is it important?
The UPI (Unified Payment Interface) transactions have been growing consistently. Also, according to the National Payment Corporation of India, the COVID-19 pandemic has fast tracked the transition to digital payments. The credit card transactions have increased by 6.7% between October 2020 and November 2020. In September 2020, the number of credit card transactions were at 1.8 million. It increased to 2.07 billion in October and 2,21 billion in November. This shows the fast transition of India towards digital payments.
Category: Economy & Banking Current Affairs