RBI Introduces New Digital Payment Authentication Framework: Enhanced Risk-Based Checks Effective from April 2026

On September 25, 2025, the Reserve Bank of India (RBI) announced the finalised “Authentication Mechanisms for Digital Payment Transactions” Directions, 2025. These new norms aim to strengthen digital payment security, promote innovation, and clearly define issuer responsibilities.

Key Features of the New Authentication Framework

The new directions encourage the introduction of additional authentication factors using evolving technologies, while retaining SMS-based OTP as a valid factor. Issuers can now integrate additional risk-based checks beyond the standard 2-factor authentication, depending on the perceived fraud risk of a transaction.

Focus on Flexibility, Security and Accountability

The RBI has also mandated card issuers to validate Additional Factor of Authentication (AFA) in non-recurring cross-border Card Not Present (CNP) transactions, whenever the overseas merchant or acquirer requests it. This move enhances security in international digital commerce.

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Interoperability and Open Tech Access Encouraged

The framework also aims to support interoperability and open access to authentication technology across payment platforms. These directions also outline the specific responsibilities of issuers, ensuring better accountability in the digital payments ecosystem.

Implementation Deadline and Background

The final guidelines follow public consultations on two separate draft directions released on July 31, 2024 and February 7, 2025. Stakeholder feedback has been incorporated. All regulated entities are required to comply with the new directions by April 1, 2026, unless stated otherwise for specific provisions.

Conclusion

With the new digital authentication framework, RBI is reinforcing trust in India’s digital payment infrastructure. The framework ensures a balance between innovation, user convenience, and transaction security, keeping pace with global best practices.

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