Experts welcome RBI’s digital payment authentication overhaul

India’s digital payments are set for a security makeover as the Reserve Bank of India’s new digital payment directions, effective from April 2026, will make banks adopt a risk-based model to authenticate transactions.

While maintaining the mandatory two-factor authentication requirement, the framework moves away from a mere one-time password (OTP) approach to a framework that customises checks based on the transaction’s level of risk.