IAMAI faces stiff opposition to new Indian online security rules

According to an association of India`s e-commerce industry, the RBI`s requirement that online credit and debit card transactions have an additional level of authentication using information invisible on the card will deter such transactions in the country. The new rules come into force on August 1. Besides, the Reserve Bank of India required that banks have a system of online alerts to the card holder for online card transactions for a value of 5,000 Indian rupees (US$102) or above.

However, banks have not informed card holders about the requirement for another level of authentication, which will lead to fewer transactions getting completed online once the new rules come into force, Mehul Gupta, associate vice president of IAMAI said on Wednesday. Customers are already finding it difficult to complete transactions, because of the poor Internet connectivity in India, and the inadequate infrastructure of payment gateways.

According to Internet & Mobile Association of India estimates, online card fraud makes up only 0.16 % of the country's 92 billion rupees e-commerce industry in India. Most of that fraud is through cards that were not issued in India, and which are not covered under the new rules.

Additionally, IAMAI has asked the RBI to detain implementation of its order, to give time to merchants and banks to improve their capabilities to handle the new authentication mechanism, and also to give customers sufficient time to get acquainted with it.