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.

EDITORIAL OF THE DAY

  • Enhanced allocations are needed for research to ‘Make in India’ for India

    Even as India flaunts its ambitious ‘Make in India’ initiative from February 13, it spurs several questions.

FC NEWSLETTER

Stay informed on our latest news!

TODAY'S COLUMNS

Urs Schoettli

The importance of Indonesia

A few weeks ago, the wo­rld was shocked by a ...

Rajgopal Nidamboor

Try to awaken the archaeologist within

Our mind is far ahead of René Descartes’ famous maxim, ...

Bubbles Sabharwal

Social media versus real life

It’s amazing how social media brings out the best side ...

INTERVIEWS

William D. Green

Chairman & CEO, Accenture