SBP directs banks to replace OTP with TPIN for digital transactions

The measures aim to strengthen digital payment security

ISLAMABAD: The State Bank of Pakistan (SBP) has issued new directives allowing banks and microfinance banks (MFBs) to replace SMS-based One-Time Passwords (OTPs) for financial transactions with Transaction PIN (TPIN) or Financial PIN (FPIN) functionality.

The measures aim to strengthen digital payment security, as outlined in a circular issued Tuesday.

Banks and MFBs that have complied with security requirements under the SBP’s earlier directive can implement the new notification system.

The changes include providing free transactional alerts via push notifications, in-app notifications, and email alerts instead of SMS alerts for mobile app transactions. Institutions must ensure in-app notifications remain enabled and maintain logs of all notifications to address disputes or claims.

As part of the revised guidelines, banks and MFBs are required to adopt standardized templates for customer notifications. Additionally, institutions will be liable to compensate customers for fraudulent or unauthorized transactions as per the liability framework.

The new rules will come into effect on January 1, 2025. Banks and MFBs have been directed to acknowledge receipt of the circular and ensure compliance.

Monitoring Desk
Monitoring Desk
Our monitoring team diligently searches the vast expanse of the web to carefully handpick and distill top-tier business and economic news stories and articles, presenting them to you in a concise and informative manner.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Must Read