Third-Party Validation Feature for BFSI Sector Businesses

What is Third Party Validation? Why is it important?

Third Party Validation (TPV) is essentially a process of confirming customer’s information by an external organisation. TPV plays an important role in securing transactions made in the BFSI Sector (Banking, Financial Services and Insurance).

Merchants in securities, broking and mutual funds operating in the BFSI sector are prone to cases of cybercrimes, asset appropriation, identity thefts, money laundering, accounting frauds etc.

In order to reduce the risk, the Securities and Exchange Board of India (SEBI) has mandated that all payments to such businesses must be made by their customers exclusively from the pre-registered bank accounts. Here a pre-registered bank account is the bank account of which the details are shared by the customer at the time of registration or enrolment for the schemes offered by businesses in these sectors.

Introducing Third-Party Validation feature by Cashfree

Cashfree now supports Third-Party Validation on Payment Gateway. Using Cashfree’s Third-Party Validation feature, businesses can now comply with the above mentioned SEBI regulatory guidelines in a manner such that the customers make payments only from their registered bank accounts.

Some of the primary use cases of Third-Party Validation feature include –

  • BFSI sector – Brokers and other online businesses can now sign up for Cashfree services and take advantage of our Third-Party Validation solution to transact online with their customers securely and conveniently in real-time.
  • Loan repayments – Merchants operating in loan management sector can use Third-Party Validation to ensure there are no discrepancies while repayments in terms of dispute cases.

How does Cashfree’s Third-Party Validation feature work?

When the customer transacts with the merchant using Cashfree’s payment gateway (with TPV feature enabled), his bank account number or CRN(customer relationship number) is mapped in such a way so as to lock the transaction to ensure that the payment is processed only from his registered bank account.

If the customer uses a non registered account number, Cashfree marks the transaction as FAILED and shows the appropriate reason for failure.

This way with Cashfree TPV feature BFSI businesses can start transacting online with their customers by availing the TPV integration of all leading banks and stay SEBI complaint.

Payment Modes supported

When you enable TPV, your customers can pay via UPI or Netbanking. 

Cashfree TPV is supported through net-banking flow for leading banks while It is supported via UPI for all bank accounts.

Contact your Cashfree Account Manager to enable TPV feature now! 

If you’re not an existing Cashfree merchant, sign up now or contact us and our experts will get back to you at the earliest. 

Must have for SEBI regulated BFSI businesses
Enable Cashfree’s Third Party Validation and accept payments through customers pre registered bank account only and stay SEBI compliant.
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