Overseas transactions not bound by domestic OTP rules

TDT | Manama

Email: mail@newsofbahrain.com

Banks cannot be compelled to mandate one-time password (OTP) verification for online purchases made with overseas companies, the government told Parliament.

The clarification came in response to an urgent proposal filed in April 2024 by MPs Khalid Buanaq, Maryam Al Dhaen, Mohammed Al Ahmed, Zainab AbdulAmeer, and Mohammed Al Ma’arafi , which called on the Central Bank of Bahrain to require OTP verification for all internet transactions and to ensure spending stays within the card’s credit limit.

While OTPs already protect online payments within Bahrain, the same system cannot be applied to overseas transactions. “The central bank would study that point to find a solution that better protects consumers,” the government said.

Authorities also highlighted existing rules covering internal controls for e-banking and electronic transfers, and measures to safeguard customer data. Banks are required to verify customers using passwords or PINs, possession-based factors, and biometric features on devices and apps.

Providers must also take steps to prevent third-party fraud, strengthen monitoring systems to detect suspicious activity, and alert customers to online scams.

The government emphasized that customers should keep account details private, contact banks only through official channels if fraud is suspected, and report incidents immediately to relevant authorities. Banks are also instructed to maintain unified communication channels, including mechanisms for sending website links and updates through licensed parties.