New ways to verify digital payments other than OTP; RBI proposes principle-based authentication

The RBI has proposed a principle-based framework to strengthen digital payment authentication, aiming to boost security and consumer trust. The new draft guidelines require all payment system operators and participants to implement multi-factor authentication, using at least two different types of credentials (like passwords, biometrics, or device tokens), with at least one being unique and dynamically generated for each transaction. Some low-value or recurring payments will be exempt, but most digital payments will need these enhanced security measures, helping protect users from phishing, smishing, and other frauds