Third-Party Validation Feature for BFSI Sector Businesses

What is Third Party Validation? Why is it important?

Merchants in securities, broking and mutual funds operating in the BFSI (Banking, Financial Services and Insurance) 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 laid some guidelines for these merchants.

As per the SEBI guidelines, all payments to such businesses must be made by their customers exclusively from the pre-registered bank accounts. 
The pre-registered bank account is the bank account, the details of which the customer would have shared at the time of enrollment 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 Cashfree Third-Party Validation feature works?

When the customer transacts with the merchant using Cashfree payment gateway (with TVP 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.

To know more about the feature and how it can help your business, contact your Cashfree Account manager. If you are new to Cashfree, please contact us here. We would love to talk to you.

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