The Indian Government has proposed rules to require multi-factor authentication for digital wallet payments, which providers say could hurt the industry.
The draft titled Information Technology (Security of Prepaid Payment Instruments) Rules, 2017, requires digital wallets or Prepaid Payment Instruments (e-PPIs) to adopt multiple-factor authentication when a customer initiates payment. That could hit mobile wallets, which often highlight seamless transactions as one of the biggest advantages over credit and debit cards.
The rules may affect mobile wallets that have picked up volume since the Indian government has begun pulling some denominations of cash out of circulation. Mobile phones can offer a variety of ways to do multi-factor authentication, but the addition of more layers of authentication can increase the friction of use for shoppers.
Overview by Ben Jackson, Director, Prepaid Advisory Service at Mercator Advisory Group
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