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The Reserve Bank of India (RBI) issued Notification No. 13199, introducing updated directions on authentication mechanisms for digital payment transactions aimed at enhancing security and efficiency in the rapidly evolving digital payments ecosystem. The notification, part of the Reserve Bank of India (Authentication mechanisms for digital payment transactions) Directions, 2025, frames a technology-neutral approach to authentication, moving beyond traditional SMS-based OTPs while retaining the requirement for two-factor authentication. This shift allows banks and payment system providers greater flexibility to adopt secure and innovative authentication solutions that improve user experience without compromising safety. The Directions apply to all payment system participants, including banks and non-bank entities, and also include provisions to align authentication standards for cross-border card transactions. These changes are expected to come into effect from April 1, 2026, reinforcing RBI’s commitment to secure, resilient, and user-friendly digital payment frameworks.