India’s digital payment system is set to undergo a major overhaul starting April 1, 2026. The Reserve Bank of India (RBI) has now mandated two-factor authentication (2FA) for all online transactions, meaning every payment must be verified in at least two ways.
Add informalnewz.com as a Preferred Source
India’s digital payment system is set to undergo a major transformation starting April 1, 2026. The Reserve Bank of India (RBI) has now mandated two-factor authentication (2FA) for all online transactions, meaning every payment must be verified using at least two methods.
Under this new rule, users will be required to use a password, PIN, OTP, biometrics such as fingerprint or face ID, or another secure method when making payments. Importantly, one of these methods must be dynamic, ensuring that no information is reused repeatedly and the likelihood of fraud is reduced.
The RBI has taken this step because digital payments have grown rapidly in the past few years, but at the same time, cases of online fraud, phishing, and unauthorized transactions have also increased. Previously, most systems relied on OTPs, but now even OTPs are considered unsafe, as hackers can steal them through various methods. Therefore, the RBI has decided to implement a more robust and secure system.
According to the new guidelines, if security rules are not followed in a transaction and fraud occurs, the bank or payment company will be responsible. This means that the customer will not suffer any loss, but will instead have to return the entire amount to the relevant institution. This will increase pressure on banks and fintech companies to further secure their systems.
In addition, the RBI has also implemented risk-based authentication. This means that the level of security will be determined based on each transaction. For example, small and routine transactions may require less scrutiny, while larger amounts or suspicious activity will require additional verification. This will maintain a balance between security and convenience. This rule will apply not only to online transactions within India but also to international online transactions, which will be implemented by October 1, 2026. This will also make online payments abroad more secure.
