The Reserve Bank of India (RBI) has recommended Unique Identity Authority of India’s (UIDAI) Aadhaar as an effective alternative for authentication in card-based payment transactions at point of sale (POS) terminals or at ATMs.
Currently, additional authentication is not required at POS for majority of card-based transactions.
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The recommendations of the Working Group on Securing Card Present Transactions have been examined by RBI and another Working Group has been set up to assess the feasibility of Aadhaar.
Considering the developments in the card payment ecosystem and effectiveness of Aadhaar, the domestic banks have been advised to adopt Aadhaar as an additional factor of authentication or move to Euro pay MasterCard Visa (EMV) Chip and Pin technology to secure the card payment infrastructure.
Banks can now use the finger print/retina scan biometric captured by UIDAI as authentication to counter both domestic counterfeit and lost & stolen card fraud.
In addition, all the new card present infrastructure will be required to be updated to enable EMV chip and PIN as well as Aadhaar acceptance.
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By GlobalData
