Securing digital payments: New OTP rules in India

Satyabrat Borah

(satyabratborah12@gmail.com)

Starting from December 1, 2024, changes in how One-Time Passwords (OTPs) are processed could cause delays in receiving them. OTPs are crucial in our daily lives for online transactions, logging into accounts, or verifying identity. These codes are sent to users via SMS or email and must be entered within a limited time to complete a transaction or access a service. The upcoming changes aim to make the system more secure and efficient. However, this new system might also bring challenges, especially for people who rely heavily on fast OTP delivery.

The main reason behind these changes is to enhance security and prevent fraud. Over the years, there have been numerous cases where scammers and fraudsters misused SMS and OTP systems to trick people. They send fake messages pretending to be from banks, government organisations, or popular companies. When people fall for these tricks, they unknowingly share their OTPs, allowing scammers to access their accounts or steal money. To address these issues, authorities have introduced stricter rules. These rules ensure that every OTP or message sent through SMS is verified before reaching the recipient. While this makes the process safer, it also means that messages will take longer to reach users.

Earlier, companies could send OTPs directly without much scrutiny. The new system requires messages to pass through layers of verification. Messages are checked against a set of approved templates to confirm their authenticity. Only after this process can the OTP be sent to the recipient. This extra step ensures that users are protected from fake messages but can slow down delivery times. For instance, if a bank sends an OTP for a transaction, it has to go through this new verification process, which could delay its arrival. This could frustrate users who are trying to complete a payment or log into their accounts quickly.

Telecom operators and service providers play an important role in this new system. They are responsible for verifying messages before they are sent to users. To ensure everything runs smoothly, telecom companies must register message templates and headers with the authorities. Headers are like the sender’s name or ID that appears at the top of an SMS. Templates define the format and content of the message. For example, a bank might use a template like “Your OTP for the transaction is XXXX. Do not share this with anyone.” If the message matches the template, it is sent. If not, it is blocked. This helps prevent unauthorised messages from being delivered. While this is a good step, it also means that businesses must invest more time and resources to comply with these rules.

For customers, this change might be inconvenient at first. Many of us are used to receiving OTPs within seconds. A slight delay can disrupt our daily activities, especially when we are in a hurry. Imagine being at a checkout counter, trying to pay for groceries online, and waiting endlessly for an OTP. Such situations could become common until everyone adjusts to the new system. However, these delays are a small price to pay for increased security. It is better to wait a little longer for an OTP than to risk falling victim to fraud.

Businesses also face challenges in adapting to these rules. They need to update their systems to align with the new requirements. This involves registering headers and templates, testing their systems, and ensuring that messages are delivered promptly. For small businesses with limited resources, this could be a daunting task. Some companies may struggle to comply, leading to disruptions in their services. This is why authorities have been working closely with businesses to help them transition smoothly. Awareness campaigns and training programs are being conducted to educate companies about the new rules.

For users, it is important to be patient during this transition period. While delays might be frustrating, they are temporary. Over time, service providers will streamline their processes, and OTP delivery will become faster. Meanwhile, there are steps users can take to minimise inconvenience. For instance, planning ahead can make a big difference. If you know you will need an OTP for a transaction, try to initiate it a few minutes earlier to account for potential delays. This way, you can avoid last-minute panic. Another helpful tip is to ensure your mobile network or internet connection is strong. Sometimes, poor connectivity can also delay OTP delivery. If you frequently face delays, consider contacting your service provider to check for any issues. Additionally, you can explore alternative authentication methods if they are available. Some services offer email OTPs or biometric verification as alternatives to SMS OTPs. Using these options can save time and reduce reliance on SMS-based systems.

It is also important to stay vigilant and avoid sharing OTPs with anyone, even if they claim to be from a trusted organization. Scammers often use fear and urgency to trick people into revealing their OTPs. Remember that no legitimate organisation will ever ask for your OTP over the phone or email. If you receive suspicious messages or calls, report them immediately. Staying informed and cautious can go a long way in protecting yourself from fraud.

The transition to the new system is part of a broader effort to improve digital security. As technology evolves, so do the tactics used by cybercriminals. To stay ahead of these threats, governments and organisations must constantly update their security measures. The new OTP rules are one such measure designed to make online transactions safer for everyone. While the initial phase may be challenging, the long-term benefits outweigh the temporary inconveniences.

Over time, users and businesses will adapt to the new system. Just like we adjusted to using OTPs in the first place, we will get used to these changes too. It is a process of learning and adapting, which is necessary for progress. The key is to be patient, stay informed, and cooperate with service providers as they work to implement these changes. Eventually, the system will become more efficient, and OTP delays will be a thing of the past.

The new rules for OTP processing are a step in the right direction for enhancing security and preventing fraud. While they may cause temporary delays, they also bring long-term benefits for users and businesses. By understanding the reasons behind these changes and taking steps to adapt, we can make the transition smoother. The key is to stay patient, plan ahead, and prioritise security over convenience. As we embrace these changes, we move closer to a safer and more reliable digital world.