The Reserve Bank of India (RBI) has just Removed so-called two-factor authentication for online card transactions up to Rs 2000. This is for encouraging electronic payments and making the process simple. The rule expected to help cab aggregators, online movie ticket sellers and e-commerce marketplaces.
Earlier users need to first enter card details on the merchant’s payment gateway. Then wait for a one-time password (OTP) to be sent to their mobile phone. Once the OTP reached use this number to complete the purchase. Card network providers and banks should inform customers about the availability of such services.
This is an opt-in service, so customers will have to specifically opt for it. If you have opted for facility then you have to go through one-time registration process which requires entry of card details and additional factor authentication by the issuing bank.
OTP isn’t mandatory for online transactions below Rs. 2,000 and this speed up small value online transactions. Relaxing the norms for 2-factor authentication is a great help for various small transactions bellow Rs 2000 across all merchant categories.