Reserve Bank of India has advised all banks to include biometric sensor in all new credit card swiping machines and to improve their existing infrastructure to enable use of Aadhaar-based biometric authentication while making card-based payments. In the circular, RBI has given banks an option to start using EMV chips and pin or shift to Aadhaar, as additional factors of authentication to secure the present payment infrastructure. As of now, one needs to only sign the transaction slip after the card is swiped, but in the future typing in a pin or using biometric authentication will be the norm. The circular follows a recommendation by a working group on Securing Card Present Transactions in 2011. The working group had then also recommended other solutions to secure payment infrastructure such as use of Unique Key per Terminal instead of using a common one for PoS terminals and setting up Derived Unique Key per Transaction (DUKPT), a one time key that are generated for every transaction, among others. Following the circular by RBI, banks will need to upgrade their infrastructure (connectivity and PoS hardware) to meet these new regulation. It needs to be noted that Axis Bank had partnered with Visa to launch first ‘eKYC’ facility in the country, letting anyone with an Aadhaar card can open bank account within minutes by using their biometric data through this service. It was also announced that Axis Bank will using Visa’s network to access Aadhaar information. So it is possible that financial service providers such as VISA…
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