But this extra layer of authentication actually prevents the misuse of your credit card, especially through online transactions. The dual-factor authentication process allows debit and credit card customers to validate their identity without using data visible on the card. As a result, banks and payment portals can check if the transaction is genuine or counterfeit in nature.

However, like any routine banking transaction, you have to enter thelog-inidandthepassword before this. The rationale is that a hacker cannot get access tothecustomer'suserid, password and mobile phone simultaneously. Itisalsoconvenientasa mobile phone is an extended arm for most individuals. Two-factor authentication is a broad term and can be implemented in multiple ways.

Banks could use mobile phone or a grid or a scrambled key chain as an additional security measure for net banking. For net banking, however, banks ask for the additional authentication only if an individual has to transfer money for third-party transactions.

For example, you may transfer money to your child or parents on a monthly basis. If you register them as beneficiaries, you don't have to go through the additional authentication . These transactions are low risk in nature as the hacker will only transfer money to himself and not to any of these registered beneficiaries . For credit cards, Visa and MasterCard have introduced an additional password, which is mandatory for any online transaction. The password can be set by the customer and changed at his/her convenience.

The scope for a fraudulent transaction is higher as all a hacker needs is the credit card number, the expiry date and the CVV number which are mentioned in the card itself. As per RBI's stipulations , all banks have to follow the dual factor authentication model for credit card transactions.

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