End of text message?Mobile OTP can be replaced by more secure digital payment security features

Digital fraud in India may ultimately face its biggest challenge as the country looks to remove mobile one-time password functionality and replace it with new technology. OTPs have become key to authenticating digital payments, with scammers using this tool to trick people and steal their money.

Hence, the Reserve Bank of India (RBI) is keen to keep it out of the equation and may leverage the latest security tools such as authentication apps or even biometric sensors on smartphones.

The decision to remove SMS-based OTP transactions will eliminate the possibility of SIM swapping or even monitoring the device for details. Having other means of authentication means people will have more control over payments and hackers will have a harder time bypassing its security measures.

This is not the first time OTP has faced security issues. X (formerly Twitter) removed the SMS-based verification process and forced users to choose an authentication app to log into their accounts.

The Reserve Bank of India faces larger issues related to this approach as it has been found to be less secure than other standards currently available. In fact, banking authorities may also consider adopting MPIN, just like how you use these special numbers to make UPI payments on various platforms.

Changing from OTP to these apps will be a big change for the ecosystem, but the biggest challenge will be those who are still using feature phones that don’t support such apps.

The RBI must cross these points and come up with a solution that works for everyone, not just those who have access to the app on their devices. We still don’t know when and in what form new security layers will be added, but there’s no denying that changes in this area are inevitable.