This step has been taken because digital transactions are increasing rapidly, and fraud cases are also rising. If you use UPI, net banking, or mobile wallets, the payment process will become slightly different.

The RBI has now made two-factor authentication (2FA) mandatory for all digital transactions. In simple terms, you will have to verify your identity in two separate steps to complete any online payment. Earlier, many platforms allowed payments with just one click or a single PIN.

What is Two-Factor Authentication?

The RBI has made two-factor authentication compulsory for digital payments. This will include at least one dynamic factor such as a one-time password (OTP), biometric verification (like fingerprint), or device-based authentication. This means that every transaction will require a unique code or security step, which will be generated instantly and cannot be reused.

What Are the Benefits of 2FA?

Earlier, many people used the same PIN for multiple transactions, which made it easier for hackers to misuse it.

With 2FA, a new security code will be generated every time. Even if someone knows your password or PIN, they won't be able to complete the transaction without the second verification step. This makes payments much safer.

What Options Will Users Get?

Banks and fintech companies will now offer multiple authentication options. Users can choose what works best for them.

Some of the options include:

• OTP + PIN
• Biometric verification + device binding
• Token-based authentication + password

Will Banks Be Responsible in Case of Fraud?

If a fraud happens due to the bank or service provider not following these rules properly, they will be fully responsible. However, if the mistake is on the user's side, such as sharing OTP or PIN, then the user will be responsible.