Single Factor Authorization boost online payment companies
Seeing this as an opportunity online payment companies like PayU, PayTM, Oxigen and others are expecting Reserve Bank of India’s initiative to adopt a single factor authorization for payments.
This move allows small e-commerce transactions boosting consumption of payment of bills, digital content, subscriptions and purchases thru online stores.
As per RBI Governor HR Khan, the central bank is looking at creating a system where two factor authentications can be avoided. He also said that the apex bank is expected to notify the norms of single factor authorization, which includes upper limits by end of 2014.
At present, financial institutions including banks use two step authentications which may include four digit pin identification and OTP (One Time Password) mode, which is cumbersome for small transactions.
However the risk involved cannot be brushed aside, liability will be on merchant’s side. He may have to access compromised data for the transactions. This in turn will give raise to increase in small time frauds from 0.05% to 1.2%. To curb this merchant will employ tools at the cost of consumer.