The RBI's draft circular aims to enhance digital-payment security by proposing an additional authentication factor that must be robust, dynamically created, and used only once. However, it exempts certain transactions, such as contactless card transactions below ₹5,000 and insurance premiums, from this requirement. The proposal also emphasizes the need for customer consent and outlines due diligence procedures for Aadhar-enabled Payment System (AePS) touchpoint operators, ensuring ongoing compliance with existing regulations.
