The Hindu Business Line : RBI fillip to online transactions

Coimbatore, March 9 A good number of users refrain from using the Internet to do online ticketing or transaction, because they think it is not safe. Reports of online banking frauds such as phishing, spamming and industrial spying seem to put them off from transacting online, say industry people.

A cross-section of users Business Line spoke to said they preferred to seek the services of a travel agent to book their tickets.

This scenario is, however, expected to change, thanks to some proactive moves. For starters, the RBI has decided to make additional authentication compulsory for all banks by August 2009.

The effort is aimed at enhancing the security of online card transactions. While reviewing various options (to enhance the security of online card transaction), the RBI has said it would be mandatory to put in place a system of ‘online alert’ to the cardholder for all ‘card not present’ transactions (online card transactions) beyond Rs 5,000, since the use of credit and debit cards has been rising in the country.

It has also said it would be based on information not visible on the card for all online transactions, except interactive voice response transactions from August 1, 2009.

These efforts could give the required impetus, trust and confidence to users to transact online. “While most organisations are taking steps to make the digital environment more safe, the pressure on cost seems to have taken precedence at this juncture,” says Mr Rajiv Chadha, Vice-President (Sales), VeriSign India.

The company’s Internet infrastructure services allow users to conduct online transactions with confidence — billion times each day, says Mr Chadha.

The RBI’s mandate is in the right direction and essential, considering that there are over 30 million credit card holders at present, he says, adding “The card holder population is bound to rise, necessitating a secure digital environment.”

“A password/PIN alone will not do, because it can be easily broken by cyber criminals. An additional authentication will be necessary because it will combine ‘what you know such as your username and password with something you have, like, say, a token, mobile phone or smart card’.”

And from the RBI’s perspective, “it is not enterprise authentication, but consumer authentication, to facilitate users to get their account details and do banking transactions online,” Mr Chadha explains. VeriSign’s authentication service provides validation for ‘something you have’ by keeping the users’ identity and transaction information within the system. “Only the security code is passed anonymously to us for validation,” he says.

According to Mr Chadha, the two-factor authentication option could be added to the consumers’ network without investing huge sums on infrastructure.

Asked if banks have approached the company for providing ‘authentication as a managed service’, he says, “we are discussing this with several banks. It is yet to catch up. But sites such as eBay, PayPal and banks in Australia have the second factor authentication in place. Mastercard and Visa have their own solution. We launched this service in the US two years ago.”

Banks have, in the meantime, started sending SMS alerts when the customer swipes his card for sums exceeding a minimum amount of, say, Rs 1,500 or makes some online purchase.

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RBI fillip to online transactions