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Government norms for wallets’ security welcome, but must not stifle innovation

Although the likes of PayTM, Mobikwik and Freecharge—e-wallets—were already gaining currency post-demonetisation, there were questions regarding their safety and security standards.

Though most wallets already follow these norms, they would additionally be required to share any breach of data with government's cyber security response team. (Image: PTI)

Although the likes of PayTM, Mobikwik and Freecharge—e-wallets—were already gaining currency post-demonetisation, there were questions regarding their safety and security standards. The government has thus done well to allay those fears by announcing a draft security framework for these payment interfaces. According to draft norms released by the ministry of electronics and information technology, companies operating prepaid payment instruments will be required to have a security policy and conduct risk assessment from time to time. Moreover, these firms would also be required to provide details on sharing of personal information, while also adhering to government standards on end-to-end encryption and providing a forum for grievance redressal.

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Though most wallets already follow these norms, they would additionally be required to share any breach of data with government’s cyber security response team. While all this is expected to confer some assurance on wallets, there is also the need to ensure that this does not stifle the ease of transactions. Wallets have become popular because of the ease of transactions they provide, if the government were to hamper the same with multiple-factor authentication and more security norms, that would just mean the death of these. Although the government needs to identify rules for insuring against breach, it has to also see that it does not stifle innovation. The increased reliance on digital mediums cannot be ensured by stifling innovation.

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