SBP orders banks to replace OTP with TPIN/FPIN for secure digital transactions

December 10, 2024 (MLN): The State Bank of Pakistan (SBP) has issued a new set of directives to banks and microfinance banks (MFBs) that have implemented the required measures to strengthen the security of digital payments.

According to the circular issued to the Presidents/Chief Executives of all Banks/MFBs, these banks will be required to replace the One Time Password (OTP) via SMS for financial transactions conducted through their banking apps or internet banking portals with Transaction PIN (TPIN)/Financial PIN (FPIN) functionality.

The banks will have to send free-of-cost transactional alerts via push notification, in-app notification and email alerts in place of SMS, to their customers for transactions conducted via mobile apps.

However, the Banks/MFBs shall ensure that in-app/push notifications on mobile apps of their customers shall always remain enabled.

Further, Banks/MFBs shall maintain complete logs of transaction notifications sent to their customers and make them available in case of disputes or claims.

Banks/MFBs shall send customer notifications for financial transactions as per the provided templates.

In case of any incidents of fraud/unauthorized transactions through customers’ mobile apps, Banks/MFBs shall be liable to compensate their affected customers. 

The aforementioned instructions shall come into effect from January 01, 2025. 

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