RBI Rolls Out New Regulations For Online Money Transfer

The online monetary exchange for merchandise & other services, more commonly known as ecommerce & e-banking has indeed been gaining traction for quite some time now. However, the Reserve Bank of India (RBI) once highly supportive of the same, seems to have taken a cautionary stand. For safe & secure Electronic Payment Transactions, like RTGS, NEFT and IMPS, RBI has asked the banks to take certain precautionary measures.

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Here are a few of the notable mentions along with their direct / indirect implications:

Cap on Customer induced options on the value or mode of transactions/beneficiaries: There could be an upper limit to the value of payment initiated by the customer. Though this may be obviously a safety to prevent fraud, online transactions need to have a much freely flowing commerce for its growth.

In case the customer wants to jump the cap, RBI has proposed that he or she must seek additional authorization. This again could be a burdensome step, if it is not an automated one (‘I Agree’ Radio Box). Additionally, the Banks should also keep a dynamic check on the ‘Velocity’ of transactions per day. In other words, the number of transactions too could spark a red-flag for an over-enthusiastic shopper.

Overall, it’s advised that the Banks should have an elaborate, yet user-friendly authentication check to ensure the transactions are being carried out by the legal owner of the money. In the bid, RBI has even asked Bank servers to capture & store IP Addresses from where the transactions are taking place.

What about Card Payment?

It is expected that Banks will anyways adopt the advanced ‘Chip-based’ version of the credit/debit card from the current magnetic-strip only cards. However, RBI has mandated that all International travelers who use card as a payment method must possess these new generation plastic money.

Fraud detection techniques & their speed of discovery seem to be the central agenda behind all these new reforms. Last year we all witnessed the encouraging nature of the apex body, guess now we have to bear a few extra steps for our own safety. What do you think?

Image Courtesy | hongkiat

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