OTP will no longer be required for online transactions! RBI made a new plan

Cases of fraud through online transactions are on the rise. RBI works from time to time to prevent this. Now RBI is going to create a new system to prevent online fraud, so that you don't need OTP to make payment. Currently, to do any online transaction anywhere, you receive an OTP via SMS for verification. This OTP method ensures that there is no tampering or fraud in online payments.

The most common alternative to OTP is an authenticator app. This requires users to recover passwords from other applications on their mobile phones. Service providers have also developed other options such as tokens in mobile applications. But all these processes require a phone.

For this RBI has asked banks to consider the option of SMS based One Time Password (OTP). But whatever the alternative, the usefulness of mobile phones will remain. Bankers say OTPs are vulnerable to fraud, where someone can get hold of them by giving customers passwords or through SIM swaps.

How successful will the authenticator application be?

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

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