Post Content UPI payments now require an extra verification step like OTP or biometrics to complete transactions. (Image Source: Gemini/AI)
On April 1, the government introduced a new UPI rule that changes how people make online payments. According to the Reserve Bank of India (RBI), the updated guidelines are designed to reduce bank fraud and improve accountability.
As part of the updated framework, the RBI says two-factor authentication will now be compulsory for the majority of online transactions, changing the way we pay for things using UPI, cards, and mobile wallets.
Under the new rule, users won’t be able to make transactions by simply entering their UPI PIN, but will also have to verify the transaction by either entering a one-time password (OTP), fingerprint authentication or facial recognition.
Transactions will only be processed if the user completes both verification steps, meaning even if someone sees your PIN, unauthorised payments won’t be able to go through.
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While the move is expected to curb online fraud and scams, users will now need to complete an additional step for each transaction, something that will make the process slower than before.
However, the two-step verification may not apply to all transactions. In a move to balance speed with security, banks will allow quick transactions from trusted devices, while transactions involving a large sum of money or placed from untrusted devices may have to undergo additional steps.
The RBI is also changing some norms that place more accountability on banks and payment platforms. In cases where fraud takes place because of a fault or system failure, these institutions will have to compensate users and ensure the quick resolution of such complaints.
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Also, banks will now consider UPI withdrawals at ATMs as regular ATM transactions, meaning they will now count towards your free monthly transaction limit. If users exhaust the free monthly transactions, they will be charged Rs 23 plus taxes for each transaction.
