Revolutionizing Security: Two-Factor Authentication Now Mandatory in Digital Transactions

India mandates two-factor authentication for digital transactions to curb fraud. Users must complete both verification steps across platforms like UPI. The central bank's directive requires compliance by 2026, primarily using SMS-based OTP as a secondary authentication. Enhanced security measures may slightly delay transactions but aim to prevent unauthorized payments.

Starting today, India's digital transactions, including those on the popular UPI platform, will now require two-factor authentication as mandated by the Reserve Bank of India (RBI). This move aims to strengthen security and prevent fraud by requiring users to complete two verification steps for every transaction.

The RBI has not specified a particular method for the secondary authentication factor but has indicated that SMS-based one-time passwords (OTP) are predominantly used. All payment systems, including banks and non-bank entities, must comply with this directive by April 2026, as per the central bank's instructions.

In addition to the extra OTP requirement, users will no longer be able to take screenshots or screen recordings in banking apps to protect them from fraud. Although the additional step may slightly delay transactions, experts like Anil Tadimeti emphasize its necessity and potential for evolving authentication methods to enhance trust and security in digital payments.

(With inputs from agencies.)