This innovation is providing for an extra layer of protection against unauthorized transactions and increasing overall trust in digital payment systems
FinTech BizNews Service
Mumbai, February 8, 2024: Today On February 8, 2024, after the meeting of the Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI), a number of decisions were announced by the RBI Governor, Shaktikanta Das. During the meeting, the six-member committee reviewed various developments related to fintech, while keeping the benchmark interest rates unchanged at 6.5%.
S Anand, CEO and founder of PaySprint, a fintech venture, says: “These developments mainly revolve around Digital Payment Security, Paytm Verdict, along with the provision of the Digital rupee. With the rising concerns and developments in the realms of Digital Infrastructure, RBI mentions- With technological advancements, alternative authentication mechanisms have emerged in recent years. Therefore, to facilitate the adoption of alternative authentication mechanisms for enhancing the security of digital payments, it is proposed to put in place a principal-based framework for the authentication of such transactions.
As a leader in fintech, the implementation of the principal-based framework for alternative authentication in digital payments is a major step forward for security. This innovation could be a game changer, providing an extra layer of protection against unauthorized transactions and increasing overall trust in digital payment systems. Users can expect to see an improvement in security measures and authentication processes when making digital payments. These changes will create a more secure payment environment & infuse solidified trust in the users largely.
No current system concerns regarding Paytm
RBI Governor Shaktikanta Das assures that no current system concerns regarding Paytm. It emphasizes bilateral agreement, corrective action, and other restrictions that favor customer interests. In one way or the other, the RBI favors fintech innovation and is likely to help businesses transcend those existing challenges.
Digital rupee users will soon be able to execute transactions in areas with limited internet connectivity as stated by RBI. The RBI has made a firm decision to introduce offline e-rupee transactions in areas with limited internet connectivity. This move will be implemented in the CBDC pilot, followed by the successful retail CBDC pilot project.
According to me, the recent move in the financial technology (fintech) sector indicates a significant step forward, offering promising prospects for the future. This development paves the way for greater financial inclusion and innovation, especially in the areas where internet connectivity is a challenge. The newly opened opportunities are expected to bring a substantial boost to the fintech industry's growth, leading to the creation of new digital financial products and services accessible to a wider audience. The move is poised to have a significant impact on the economy, enabling people from all walks of life to access financial services and participate in the digital economy.
Unsurprisingly, financial parameters for non-banking financial companies have contributed to great improvement, particularly in areas dealing with good governance, robust risk management, and customer interest, which have guaranteed the safety and stability of financial institutions, just as the Governor added.
Proposed UPI transaction limit boost to Rs 5 lakh for payments to hospitals and educational institutions, aligning with RBI's plan to establish a cloud facility for enhanced financial data security.
Therefore, in the evolving scenario of fintech, the RBI’s visionary approach, including the proposed UPI transaction limit and principal-based framework for digital payment security is all set to make an advent for a transformative era. This move would foster increased security, trust, and inclusivity, especially in areas with limited internet connectivity. The envisioned offline e-rupee transactions and commitment to fintech innovation signal a future, where financial services transcend barriers, fueling economic growth and offering a diverse range of digital products. The RBI’s emphasis on governance and customer welfare ensures a robust and inclusive financial ecosystem.
Ankit Ratan, CEO & Co-founder at Signzy: "We laud the RBI's continuous focus on enhancing digital trust by implementing principle-based framework for authentication proposed to enhance security of digital payments. The rising financial cyber crimes are eroding the digital trust within the ecosystem, with approximately 1.1 million cases of such frauds had been registered in 2023 that involves an amount of Rs. Rs 7,488.6 crore. By adopting a principle-based framework for authentication, businesses not only curb the financial frauds but will also be able to provide a secure environment for its customers and protect their data. The RBI also emphasised on streamline the process of on-boarding of Aadhaar Enabled Payment System (AePS) service providers and introduce additional fraud risk management measures. We believe that compliance transcends mere checkbox exercises; it serves as a critical tool in ensuring the safety of customer data and protecting the reputation of businesses."
