"This will definitely help to prevent many cash frauds while using credit or debit cards for online purchases. Enhancing the security level is much needed in the face of rising usage of cards for online transactions," IDBI Bank's executive director, Sushil Muhnot told PTI.
As per the RBI guidelines, customers will have to register their cards from tomorrow onwards with the respective merchants--Visa or Master Card and create a security password.
While making online purchases, the cardholder will have to use this second verification apart from the card verification value number, which is the main saftey parameter used presently.
A senior State Bank of India offcial said that although the implementation of the new method may create some technology challenges to banks, the move will enhance the customer confidence to go for online purchases.
"There may be some challenges in the initial stage to implement the new method as banks have to be ready with the software required to identify the second authentication or password while making transactions," the official said.
However, the Reserve Bank's decision to step up the security level for card shopping will significantly help to reduce the misuse of cards, he said.
"Presently, the CVV number, date of birth and the expiry date on the cards are used to ensure secured purchases. This is not sufficient in the present context where fraudsters find new ways to misuse the cards," a senior official with a leading private sector bank said.
The apex bank decided to introduce a second level of security for online transactions using credit/debit cards in the backdrop of escalating number of credit card frauds across the country.