ETtech Explainer: RBI’s digital payment authentication rules & their impact

The Reserve Bank of India (RBI) has issued the Digital Payment Transactions Authentication Directions, 2025. These lay out broad principles for how banks and payment providers must secure digital transactions, including requirements such as mandatory two-factor authentication.

ETtech explains the specifics of the new rules and what they mean for the payments ecosystem.

Why has RBI introduced these rules?

A: Until now, India’s digital payment ecosystem largely relied on SMS-based one-time passwords (OTPs) as an additional factor of authentication….