Preventing fraud plays a significant role in the digital payments space. We must have encountered many frauds, both online and offline, during our lifetime.
Unfortunately, the search for effective methods to eradicate fraud never ends. Fraudsters will always find new methods to commit crimes. There are many tools available to end the same, the latest one being 3-D Secure.
What is 3-D Secure?
Putting it simply, 3-D Secure is an additional layer of cardholder authorisation added to an online transaction. VISA and Mastercard offer this tool, and it is known as ‘Verified by Visa’ and ‘MasterCard SecureCode,’ respectively.
3-D Secure is a three-sided security system that provides security while performing transactions and transferring payment data amongst
Issuing Bank
Acquiring Bank
Payment Gateway (link that connects acquirer and issuer)
How does it work?
Several steps are involved when conducting an online transaction. A few additional steps for 3-D Secure can significantly reduce the risk of online fraud:
A cardholder enters payment information on a webpage
Payment provider sends request to check whether 3-D Secure technology is active
If Yes, the customer is redirected to the 3-D Secure page
The cardholder who receives the OTP must enter it in the appropriate field
The result comes in the form of a response to the server of the payment provider
The payment provider sends data to the acquiring bank
The acquiring bank authorises the transaction and informs the customer whether the transaction was successful or not
3-D Secure 1.0 v/s 2.0
3-D Secure 2.0 is replacing 1.0 to provide a better user experience, which will eventually lead to successful transaction conversion. The need to enter static passwords is replaced by other methods such as biometrics in 3D Secure 2.0.
3-DS 2.0 examines over 120 data points. If the transaction is deemed low risk, no further action is required; if the transaction is deemed high risk, 3D Secure requires customers to verify their identity through biometrics or two-factor authentication.
Benefits of 3-DS 2.0
With the 3-DS 2.0 update, customers will have a more fluid experience when conducting transactions on both mobile and desktop/laptop devices. Benefits of the latest update are:
Better User Experience
Increase in Online transactions
Higher conversion rates
Multiple Device support
Conclusion
Security is of the utmost importance, especially when customers conduct online transactions. Today, there is a significant shift toward online transactions, and customers must have mental comfort while making these transactions. 3-DS 2.0 makes the transactions safe, seamless and efficient, while also providing a better user experience.
In a world that has moved to the internet and the mobile, data privacy is paramount. This is more evident in financial services. As India embraces digital financial services, the volume of sensitive consumer data has soared. Protecting this data is essential not only for regulatory compliance but also for building and maintaining consumer trust. Robust data privacy practices prevent financial crimes such as identity theft and fraud, ensuring the integrity of financial systems, and the security of customers.
The Significance of Data Privacy in Indian Fintech
The digital transformation of financial services in India has led to an explosion in the amount of sensitive consumer data being collected, processed, and stored. Ensuring the privacy and security of this data is vital for maintaining consumer trust and preventing financial crimes such as identity theft and fraud.
Challenges in Prioritising Data Privacy While Fostering Innovation
Regulatory Compliance: The Digital Personal Data Protection Bill, 2023, aims to provide a robust framework for data protection. Fintech companies must navigate these regulations, requiring significant expertise and resources to ensure compliance without stifling innovation.
Data Security: With rising cyber threats, fintech firms must prioritise data security. Implementing advanced security measures like encryption, multi-factor authentication, and regular security audits is crucial to protect consumer data from breaches.
Transparency and Consent: Consumers are increasingly concerned about data usage. Fintech companies must ensure transparency in their practices and obtain explicit consent from users for utilising their personal information for various analysis, which can be challenging in a rapidly evolving industry.
Balancing Personalisation and Privacy: Personalisation enhances user experiences but requires access to detailed consumer data. Fintech companies must balance data utilisation for personalisation with respecting consumer privacy, ensuring that customer data is protected at all times.
Strategies for Prioritising Data Privacy at CARD91
Embedding Privacy into Product Development: CARD91 integrates data privacy considerations from the initial design phase of all products and services, ensuring inherent protection of consumer data.
Advanced Security Technologies: CARD91 deploys cutting-edge security technologies, including AI for threat detection and end-to-end encryption, to safeguard consumer data from cyber threats and breaches.
Regular Privacy Audits and Assessments: Frequent privacy audits and assessments help CARD91 evaluate and enhance the effectiveness of its data protection measures, identifying and addressing potential vulnerabilities promptly.
Employee Training and Awareness Programs: Ongoing training and awareness programs for employees foster a culture of privacy awareness, ensuring all staff members understand their role in protecting consumer data.
Consumer Education and Transparency: CARD91 prioritises transparency by clearly communicating its data privacy practices to consumers and providing educational resources to help them understand their rights and protection measures.
Robust Incident Response Plan: A comprehensive incident response plan enables swift and effective action in the event of a data breach, minimising its impact on consumers.
By focusing on these key strategies, CARD91 ensures that data privacy remains a top priority while fostering innovation in the Indian fintech market. This approach not only complies with regulatory requirements but also builds lasting trust with customers, driving long-term success.
The Role of Government and Regulatory Bodies
The Indian government and regulatory bodies, such as the Reserve Bank of India (RBI), play a pivotal role in shaping the data privacy landscape. Initiatives like the RBI’s data localisation mandate and the forthcoming Digital Personal Data Protection Bill emphasise the importance of protecting consumer data. The establishment of the Data Protection Authority (DPA) will further strengthen the regulatory framework, ensuring compliance and safeguarding consumer interests.
Conclusion
As India’s fintech sector grows, giving importance to data privacy while fostering innovation is critical. At CARD91, we are dedicated to protecting consumer data through privacy-centric practices and robust security measures, ensuring the safety and trust of our customers.
In an era where data is the new currency, excelling in data privacy is not just a legal obligation but a strategic advantage. Fintech companies that prioritise data privacy will build lasting relationships with their customers, driving long-term success in the dynamic Indian fintech landscape.
At CARD91, we are committed to creating a secure and innovative environment for financial technology in India, ensuring a sustainable and trustworthy future for the industry.
Authored by Astha Bishnoi, Manager – Partnership & Sales at CARD91
As India advances in its digital transformation journey, the payments landscape is rapidly evolving. Over the past decade, driven by smartphones and government initiatives like Digital India, the financial ecosystem has seen significant shifts. One of the most notable changes is the increasing adoption of contactless payments, especially in credit card transactions. Unified Payments Interface (UPI), mobile wallets, and contactless payments are at the forefront of this revolution.
Contactless payment methods such as tapping cards at POS terminals (up to ₹5000), National Common Mobility Cards (NCMC) for transit, and mobile wallets like Google Pay and Apple Pay have made transactions faster and more convenient. Globally, this trend is gaining traction across sectors like retail and public transport, further enhancing the payment experience.
The Benefits of Contactless Payments
Speed and Convenience: Faster transaction times improve the shopping experience, especially in busy cities.
Enhanced Security: Each transaction uses encrypted, unique codes to reduce fraud risk.
Hygiene and Safety: Less physical contact promotes hygiene, particularly important post-pandemic.
Mobile Wallet Integration: Contactless cards easily integrate with mobile wallets, adding flexibility to payments.
Adoption in India
In cities like Mumbai, Delhi, and Bengaluru, contactless payments are gaining momentum, with retailers and public transportation adopting NFC-enabled terminals. While rural uptake is slower, government-led digital literacy and financial inclusion initiatives are helping drive adoption in underserved areas.
Safety and Security Perceptions
The Reserve Bank of India (RBI) has implemented guidelines to enhance contactless payment security, such as setting transaction limits and mandating two-factor authentication for higher amounts. Financial institutions and payment providers are actively educating consumers on encryption and tokenization to ensure their financial data is secure. Additionally, advancements like biometric authentication and dynamic CVV codes further bolster the security of these transactions.
The Future Outlook
Widespread Adoption: Contactless payments will continue to grow in popularity across both urban and rural areas.
Security Innovation: New technologies and stricter regulations will strengthen the safety of these transactions.
Integration with Emerging Tech: Contactless payments will merge with technologies like blockchain and IoT, enhancing their functionality.
Sustainability: The industry is adopting eco-friendly practices, from digital receipts to green card materials.
Credit Line on UPI: An emerging trend is the integration of credit lines with UPI, allowing users to make UPI transactions using a pre-approved credit line without needing a physical card. CARD91’s Credit Line Management System enables banks to manage these credit lines effectively, leading the next wave in digital banking.
Conclusion
Contactless payments are set to shape the future of credit card transactions in India. Their advantages—speed, convenience, and security—are well-suited to the needs of modern consumers. As the digital payments ecosystem evolves, embracing contactless methods will contribute to a safer and more efficient financial landscape, making the future of credit card transactions both seamless and secure.
Fintech being a leading light of the startup ecosystem over the years, has played crucial roles in development of the financial services industry. Strong ecosystem level changes are opening up opportunities for new business models. Introduction of blockchain technology in this evolving sector has a considerable impact and advantage.
Blockchain technology is a “chain of blocks” where each block holds timestamped digital data and it’s own previous blocks’ unique identity. The unique features of blockchain have potential to benefit the financial sector significantly.
In this blog we will cover following topics:
What is Blockchain?
How Blockchain is transforming the financial ecosystem
Fintech and Blockchain-Use Cases
Future of Blockchain in Finance
What is Blockchain technology and its features?
Blockchain is a decentralized database management system. The name signifies itself, a series of blocks containing transaction data, a hash identity, and node details are connected to form a chain. Blockchain is distributed ledger technology (DLT) which allows data to be stored globally on thousands of servers.
Below are the key features of Blockchain for its deeper understanding:
Security and Transparency
Financial services all across the world are still centralized and multi-folded. Financial data is mostly stored in centralized databases, and it has to go through multiple intermediaries like front-back offices etc which results in lack of transparency across the system, wherein safety being solely dependent on intermediaries and their level of security.
This lack of transparency within the system fosters security threats or data breaches across the organization.
With the introduction of blockchain technology, transparency and security can be ensured simultaneously. Its distributed consensus based architecture facilitates the security towards data breaches, security threats etc.
Privacy
Blockchain system provides operable keys-a public one and a private key. Public key is available to all users in the network. However, the private key is only accessible to the stakeholders of the transaction. This enables transparency wherein the transaction will be visible to all users in the network with public key whereas the stakeholders and the transaction details will only be visible to those who have access to the private key. This process enables transparency within the system while securing the confidential information of the stakeholders.
How does Blockchain work?
Blockchain records validate and store the data in its database. So, it leverages to validate a transaction happening across the network. Each block in the block chain contains follow information
A hash pointer (link to previous block)
A timestamp
Transaction data
Future of Blockchain in Fintech Technology
Andy Martin, a world-class blockchain expert, recently forecasted market changes based on the token economics forced by blockchain and described what exactly it provides:
“Decentralized communities provide certainty of identity, “who am I dealing with”, the certainty of provenance, “what am I buying” and smart contracts give certainty of execution, “if I do this, then I get paid” in these new marketplaces.”
Let’s understand better how Fintech and Blockchain can be chained together to build a FinBlock ecosystem.
Blockchain in the fintech industry can provide us a more seamless and effective way to banking, built around concepts of equity and decentralization. Blockchain-based fintech enables seamless transfer of funds, top of the line security and transparent financial tracking.
Reduced Costs and Transactions in Minutes
With blockchain integration in fintech applications, sending money, regardless of the amount, is much faster. Blockchain-based transactions occur in real time, so the recipient will not have to wait for days or weeks to get the money.
In addition to this, fintech applications powered by blockchain technology can drastically reduce the transaction costs enabling direct, P2P transactions that eliminate any middleman, meaning all unnecessary expenses and fees.
Use Cases of Blockchain in Fintech
Some use cases of blockchain in fintech services are: Cross Border Payments, Lending Platforms, Credit Score, Invoice Management and Billing Solution, Fund Investment, Government Expenses, Financial Record Keeping, Stock Exchange and Initial Public Offering
Let’s discuss Cross Border Payments and Lending Platforms use case in details:
Cross-Border Payments
Banks always charge an additional fee for every transfer or payments across borders, which in a way becomes expensive and slow.
E.g If you want to transfer money from India to the USA, the transfer goes through one or more financial institutions before it reaches the receiver.
Introduction of Blockchain allows individuals to send and receive money with minimum interference of different intermediaries, which enhances the payment settlement quickly and efficiently.
Lending Platforms
When it comes to lending, one is required to establish trust and make a transaction happen. However, with blockchain technology in fintech, borrowers can directly deal with the lenders on the rate of interest, installments, and duration of the transaction with the help of immutable smart contracts.
Conclusion:
Blockchain in financial services can offer multiple benefits, which can help transform the finance industry. According to KPMG, “blockchain can reduce errors by up to 95%, increase efficiency by 40% and reduce capital consumption by up to 75%”. Blockchain in finance is an exciting concept with the potential to transform the finance industry.
Blockchain can help different financial institutions and government entities to improve trust, bring transparency and cut down costs.
