Govt to plug holes in e-transactions

NEW DELHI: The government is willing to strengthen laws to plug security holes in digital payment systems, and will soon invite ideas from users on how to protect consumer interests, Union minister Ravi Shankar Prasad said on Friday.

The Narendra Modi government is pushing for a largely digital economy, which it says will stamp out illicit cash and end counterfeiting.

Digital transactions in the country has increased by 195% between October 2016 and January 2017, after the government banned high-value notes.

“Digital payment rules of e-wallets shall be floated soon to take into consideration consumer interest and safety. The rules will be made after taking into account issues and concerns that arise after the consultation paper is floated,” said Prasad.

The draft of the consultation paper is ready, he said.

“The consultation paper will look into issues like — what rights does the consumer have as a wallet user? What do they do if their money is lost or stolen? As wallets become a part of a mainstream payments system, standardisation is a necessary step. We had three rounds of work- shops with wallet service providers and some of them have volunteered to implement insurance for wallets. However, at this stage, this is not mandatory,” a senior Indian government official said.

The official also added that issues around interoperability of wallets was being worked upon. However, the official said it was a regulatory issue and RBI was working in a calibrated manner. Full interoperability will come soon, the official added.

Critics of the demonetisation exercise and experts have pointed out the country’s online payment system is not foolproof and open to potential attacks by cyber thieves who can wipe out millions of rupees by bypassing the weak firewalls.

The consultation paper will give consumers as well as merchants a chance to voice their worries about the new payments system.

The minister said the IT ministry was also in talks with banks and National Payments Council of India to help merchants switch over to digital payments.

A senior official said that PCI — a data security standard adopted by major cards including Visa, MasterCard and American Express — and USSD are also being strengthened.