India is considering replacing mobile one-time-passwords (OTPs) with new technology to combat digital scams. OTPs are used for verifying digital payments but have been exploited by scammers. The Reserve Bank of India (RBI) aims to enhance security by adopting authentication apps or biometric sensors on smartphones, which would prevent SIM swapping and spying on devices.
RBI's approach to security
The RBI plans to eliminate SMS-based OTP transactions to boost security and give users more control over payments. This move would make it harder for hackers to bypass security measures.
Comparison with other platforms
Other platforms, like X (formerly Twitter), have already switched from SMS-based verification to authentication apps for improved security. The RBI acknowledges the need to address security concerns and may opt for Multi-Factor Authentication (MPIN) similar to UPI payments.
Challenges and considerations
Transitioning from OTPs to authentication apps poses challenges, especially for users with feature phones lacking app support. The RBI must ensure inclusivity and accessibility for all users, not just those with smartphones.
What's next?
While the timeline and implementation details are unclear, it's evident that a shift in security measures is necessary. The RBI aims to find a solution that balances security and accessibility for all users.
Furthermore, Paytm Payments Bank has been recently directed by RBI to stop accepting new deposits or top-ups in any customer accounts, wallets, or FASTags after February 29 due to non-compliance with regulations.
Paytm competitors see a spike in app downloads
According to a recent report by Moneycontrol, after the RBI's order, competitors of Paytm such as PhonePe, Google Pay, and NPCI's BHIM app experienced a surge in downloads from the Google Play store.
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