Ensuring security of payment systems a big challenge: RBI

Reserve Bank of India's deputy governor KC Chakrabarty today said ensuring security of payment systems and protecting customers' funds is the biggest challenge before central banks and payments systems operators.

Banks should spread awareness to increase usage of newer payment systems, Chakrabarty said, adding, "this (safety and security) is a big challenge to be faced to avoid erosion of customer confidence in the new age payment systems."

Delivering the inaugural address at Banknet's 7th annual conference on payment systems in Mumbai, Chakrabarty said the RBI had mandated the additional factor of authentication for all card-not-present transactions - perhaps the first attempt by any regulator - apprehending security being compromised.

"The RBI is currently in discussion with "banks and the card companies to introduce an authentication system for transactions at POS (points of sale)," Chakrabarty said.

Apart from that, in case of ATM cards, it is also mulling a move over to the more secure "Chip and Pin" cards from the current pin-only system to check instances of cloning, Chakrabarty said.