The RBI directions of September 29, 2016 on Aadhaar based authentication for Card Present Transactions is yet another intiative taken by RBI to improve the security of Card transactions and reducing the fraud possibilities.
The policy reiterates and sets a deadline of January 1, 2017 by which the Card present transactions should be equipped to be authenticated with biometric and aadhaar identity.
This would require some additional efforts at the POS points and switching of the instruments to the new versions equipped with biometric verification and connectivity to enable aadhaar verification.
The advantage is that while the EMV Chip and PIN based authentication is now fortified with the biometric of the card owner preventing even the family members of the card owners using the card on behalf of others.
The downside to the new practice is that the biometric information of card users will get transmitted through the various POS systems and along with the card data, could pose a security risk. Mitigating this risk requires a serious effort on the part of the Banks to educate their merchant customers and also ensure proper security measures at the POS points.
Naavi
