RBI warns against evading validation in CNP payments

Tags: News
The Reserve Bank has clamped down on the entities evading the mandatory additional authentication process where payments are made by customers for a service via 'Card Not Present' (CNP) transactions.

Various e-commerce and Interactive Voice Response transactions come under such payments. It also applies to all transactions using cards issued in India for payments on merchant sites even where there is no outflow of foreign exchange.

In a notification, RBI said: "It is advised that entities adopting such practices leading to wilful non-adherence and violation of extant instructions should immediately put a stop to such arrangements.

"It is also observed that these entities are evading the mandate of additional authentication/validation by following business/payment models which are resulting in foreign exchange outflow."

RBI has clarified that the linkage to an overseas website/ payment gateway cannot be done via CNP transaction.

RBI said it was brought to its notice that certain CNP transactions were taking place without additional validation.

It said such camouflaging and flouting of extant instructions on card security were resulting in an outflow of foreign exchange in the settlement of these transactions.

The apex bank said that it is not acceptable as this is in violation of the directives issued under the Payment and Settlement Systems.

It said such transactions have to be through a bank in India and the transaction should necessarily settle only in Indian currency.

Post new comment

E-mail ID will not be published
CAPTCHA
This question is for testing whether you are a human visitor and to prevent automated spam submissions.

EDITORIAL OF THE DAY

  • The world is moving away from fast food like never before

    Despite spending $1.8 billion every year on worldwide advertising and promotion, McDonald’s sales are plummeting.

FC NEWSLETTER

Stay informed on our latest news!

INTERVIEWS

GV Nageswara Rao

MD & CEO, IDBI Federal Life

Timothy Moe

Goldman Sachs

Chander Mohan Sethi

CMD, Reckitt Benckiser India

COLUMNIST

Urs Schoettli

It’s time for Japan to step out of its shell

The execution of a Japanese hostage by ISIS has sho­cked ...

Zehra Naqvi

The urge to tell stories

One wants to tell a story, like Scheherzade, in order ...

Bubbles Sabharwal

Truth about truth

The question to ponder is, “is it the truth because ...

INTERVIEWS

William D. Green

Chairman & CEO, Accenture