Business News / Now OTP will not be required for online transactions, RBI is making a new plan

Business News: Cases of fraud through online transactions are increasing. To stop this, RBI keeps working from time to time. Now RBI is going to create a new system to prevent online fraud, so that you will not need OTP to make payment. At present, for doing any online transaction anywhere, you receive an OTP through SMS for verification. This OTP method ensures that there is no disturbance or fraud in online payment.

Whenever you do any online transaction, you receive an OTP through SMS for verification. This OTP method ensures that there is no disturbance or fraud in online payment. Now RBI is planning to bring an even further safety method. RBI is working on authentication framework. Through this, online transactions of customers will get additional security. For this, RBI has asked banks to consider the option of SMS based one-time password (OTP). But whatever the alternative, the utility of mobile phones will remain. Bankers say OTPs are susceptible to fraud, where someone can get hold of it by divulging the password to customers or through SIM swaps.

The most common alternative to OTP is an authenticator app. This requires users to retrieve the password from another application on their mobile phone. Service providers have also developed other options like tokens in mobile apps. But all these processes require a phone.

How successful will the Authenticator app be?

Rajdeepkumar Gupta, MD and CEO of Route Mobile, says that his company sends about 400 crore OTPs every month on behalf of various service providers. But, with the growth of digital systems, the possibility of fraud also increases. He said increasing fraud has prompted the company to launch the Truance division. TruSense has introduced OTP-less authentication, where the service provider will have a direct data connection with the users' device. It will identify the mobile number and exchange the token with the device without the user having to enter an OTP.

But, there is also a new risk of deepfakes

David Wiger, executive VP of digital identity, says biometrics aren't the only better authentication option, as advances in AI have created a new risk of deepfakes bypassing facial recognition. According to Vigar, the mobile phone is the best identifier for the Indian market as the customer has to verify his identity before getting a connection. Emails are not as good an option, as it is easy to create fake email identities. Moreover, anyone can generate the email without KYC.