RBI’s global hackathon to take digital payments beyond smartphones and OTPs

Mumbai: The Reserve Bank of India (RBI) has announced its first global hackathon to take digital payments beyond the present limitations of mobile phones and OTPs and to make them safer. The first edition of the central bank’s HaRBInger 2021 aims to identify and develop solutions that have the potential to make digital payments accessible to the under-served, enhance the ease of payments and user experience while strengthening the security of digital payments and promoting customer protection.
Participants in the challenge (open to all over 18 years) have an opportunity to win Rs 40 lakh. The four challenge areas are innovative, easy-to-use, non-mobile digital payment solutions for converting small-ticket cash transactions to digital mode, context-based retail payments to remove the physical act of payment while transacting in-store, alternative to OTP and PIN for authenticating digital payments and developing a tool that will monitor social media analysis.
The hackathon is owned and sponsored by the RBI and is hosted on Application Programming Interface Exchange (APIX) platform. A participant has to register online throught the link provided on the RBI’s website.
“The challenge has been to sustain the growth in payments and ensure a shift in customer behaviour towards the vision of a less-cash society by creating a framework of robust, convenient, accessible, low cost and secure digital payment and settlement system,” the RBI said.
The RBI note on the hackathon said that to onboard the underprivileged and underserved faction of the society to digital payments, non-mobile, swift and easy-to-use innovative solutions for converting small value cash payments of an amount less than Rs 100 to digital mode, needs to be explored. This would enhance the reach of digital payments and enable greater inclusion of the underserved into the mainstream.
The context-based retail payments are aimed at removing the physical act of payment from the payment experience. “Context-based payments require no direct interaction between the customer and the merchant. It is mostly contingent on completion of an underlying activity and may include automatic payment at grocery stores once a customer exits the store,” the RBI said. It added that different use cases in the retail segment can be thought of to enable a seamless payment experience which may include an application. The solutions may also focus on consent mechanism, fraud prevention and security features besides enhancing the user experience.
The search for alternatives to PIN and One-Time Password (OTP) is driven by the fact that these are received by the remitter over his mobile phone. “While the SMS through which the OTP is received is not an encrypted secure messaging system, the instances of digital payment frauds where the users are tricked into sharing the OTP have also been observed. As such, an alternate smart secure authentication mechanism may result in more secure digital transactions,” the RBI said.
Given that customers are now voicing their concerns largely on social media, the analysis of consumer complaints and concerns over platforms like Facebook, Twitter, Instagram may facilitate the digital payment operators as well the regulator in taking proactive and swift action for consumer protection and fraud prevention.

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