Card data storage: Security first, convenience too
The new payment aggregator rules being drawn up by RBI might be inconvenient to customers and RBI must find a midway between security and convenience
Virtual is the new virtue. The footprint of modern civilisation is digital and online. Policymakers want to push India towards digital and online payments and shun cash as far as possible. This has led to an explosion of non-cash mode of payments, especially over the past few years. One small number will prove the galloping speed – digital payment transactions in the country jumped by 76% in the January-March quarter of 2021 compared to the same window in 2020, a period almost unaffected by the economic slowdown on account of the pandemic.
The rising transaction also opened up avenues of prosperity for fraudsters who began exploiting the huge jump in the number of individuals transacting digitally to swindle them. Data from authoritative sources indicate that digital fraud attempts originating from India against financial services in September-December 2020 business rose by 89% in January-April of 2021. RBI and all major banks constantly warn the public of invisible fraudsters on the prowl.
It is in continuation of the safety measures that Reserve Bank is, according to reports, against storing debit or credit card data in servers of merchant establishments as it is framing the new payment aggregator rules. One of the steps the central bank might take would necessitate customers to punch the 16-digit debit or credit card number every time they make a payment. Right now, they have to key in the CVV and an OTP, but rising complaints of frauds are probably behind the thought process of the central bank.
While it would certainly add to the layers of security, it might also make the process cumbersome and impact the convenience factor that drives the digital and online payments. While the security of money certainly takes precedence, the convenience factor cannot be sacrificed outright. The central bank might deploy its thinktank or consult domain experts on how to add another layer of security without enjoining the customers to memorise a 16-digit number or keep it handy every time they want to make a payment. Convenience and security cannot be mutually exclusive.