Committee on Security for Digital Payments

The Committee of Chief Ministers tasked with promoting digital payments has decided to set up a panel to examine security concerns that could arise in such transactions and recommend measures to address them.

The committee on security for digital payments will be headed by IT Secretary Aruna Sundararajan and Telecom Secretary J S Deepak.

The 13-member CMs’ Committee, at its second meeting, also recommended that Aadhaar-enabled payment transactions should be kept free for users. The Unique Identification Authority of India would shortly roll out a common Android-based Aadhaar Enabled Payment System (AEPS) application that has been developed in collaboration with Tata Consultancy Services (TCS), to ease the cashless payments process for merchants.

It was decided that the Reserve Bank of India (RBI) should allow authentication through iris scanner and One Time Password (OTP) for AEPS. Additionally, there would be no charge on AEPS transactions.

The committee also pitched for inter-operability of all prepaid instruments on the United Payments Interface (UPI) platform along with a common QR-Code for simplifying transactions.

In order to use this application for carrying out cashless transactions, merchants will need a smartphone and a fingerprint scanner. Transactions on this application can be done without any card or PIN. The application will be made available to all banks and the banks would encourage merchants in their vicinity to adopt this application.

To popularise digital transactions, the committee has proposed a detailed review of the Merchant Discount Rate (MDR) regime, inter-linking of various digital payments platforms such as USSD (mobile short codes that can be used to make payments) with UPI, self-boarding by small merchants and a common application for UPI, among others.

It also set a time line of December 25, for roll out of the upgraded version of USSD that will make it simpler to use. It was decided that IT Secretary will prepare a status note on the procurement options for Point of Sales (PoS) machines and Micro-Automated Teller Machines (ATMs) to help resolve issues relating to procurement of these equipment.