New ways to verify digital payments other than OTP

In today's digital era, ensuring the security of online transactions is paramount. While One-Time Passwords (OTPs) have traditionally been the go-to method for verifying digital payments, technological advancements have paved the way for alternative and more sophisticated verification methods. Here, we delve into the latest innovations reshaping the landscape of digital payment verification.

Amit Kumar, CTO, Easebuzz

SMS-based OTPs, while widely used, have limitations. Recognizing this, the Reserve Bank of India (RBI) has proposed a shift towards a principle-based framework for authentication of digital transactions. RBI is in the process of formulating the principle based framework, and guidelines for alternative payment authentication methods. 

Widespread adoption of these new methods would require collaboration between banks, payment service providers, and technology companies. User education and awareness regarding these new methods will be crucial for smooth implementation. The shift towards the proposed principle-based framework signifies a move towards a more secure and dynamic digital payment ecosystem in the country.

Shikhar Aggarwali, Chairman, BLS E-Services

One-time passwords (OTPs), delivered conveniently via SMS or email to customers, have served as the prime mode of authentication for ever-growing online and digital transactions through bank accounts and countless other digital services. However, there have been vulnerabilities associated with OTP that become increasingly evident with time.

The Reserve Bank of India (RBI) has always prioritized the security of digital payments, particularly the requirement for additional authentication (AFA) factors. In its “Statement on Developmental and Regulatory Policies,” the RBI has recommended a principle-based framework for the authentication of digital payments. 

There is a spectrum of possibilities for alternative authentication mechanisms, including, but not limited to the following:

* Biometric authentication utilizing fingerprints, iris scan, or facial recognition

* Hardware tokens to generate unique one-time auth codes 

* Secure in-app prompts requiring customer confirmation for transactions

* Risk-based authentication tailor-made for customers based on user profiles.

Animesh Jha VP, Fraud & Risk Management Wibmo, A PayU Company

Innovations in digital payment verification methods continue to evolve, offering alternatives to traditional OTPs (one-time passwords). Biometric authentication stands out as a promising avenue, leveraging unique physical attributes such as fingerprints, facial recognition, or even iris scans for secure transactions. 

Additionally, behavioral biometrics analyze patterns in user interactions, like the typing speed or mouse movements, adding an extra layer of security without the need for explicit user action. 

Furthermore, advancements in AI and ML enable continuous authentication, monitoring user behavior throughout a session to detect anomalies and potential fraudulent activity in real-time. These emerging methods not only enhance security, but also streamline the payment process, offering users a seamless and frictionless experience in the digital realm.

Conclusion

The landscape of digital payment verification is evolving rapidly, with a wide range of innovative methods reshaping the way transactions are secured. From biometric authentication to blockchain technology, these advancements offer robust solutions to safeguard against cyber threats, and ensure the integrity of digital payments in an increasingly interconnected world. 

As the digital payment ecosystem continues to evolve, embracing these innovative approaches will be essential to staying ahead of emerging threats and delivering a seamless and secure payment experience for users worldwide.