The State Bank of Pakistan (SBP) has introduced updated guidelines permitting banks and microfinance banks (MFBs) to replace SMS-based One-Time Passwords (OTPs) with Transaction PINs (TPINs) or Financial PINs (FPINs) for authorizing financial transactions.
According to a circular issued on Tuesday, the changes aim to enhance the security of digital payments. Banks and MFBs that have already met the security requirements outlined in a previous directive from the SBP are eligible to implement the new system.
Under the revised rules, institutions must provide free transaction alerts through push notifications, in-app notifications, and email alerts instead of relying solely on SMS notifications for mobile app transactions.
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To ensure transparency and dispute resolution, in-app notifications must remain active, and logs of all notifications must be maintained.
Additionally, banks and MFBs are required to use standardized templates for all customer notifications. In cases of unauthorized or fraudulent transactions, institutions will be held responsible for compensating affected customers in line with the established liability framework.
These measures will take effect on January 1, 2025. The SBP has instructed all banks and MFBs to confirm receipt of the circular and to ensure full compliance with the updated regulations. The move is part of ongoing efforts to bolster the safety and efficiency of digital payment systems in the country.
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