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28

Question 28

With reference to digital payments, consider the following statements:
1. BHIM app allows the user to transfer money to anyone with a UPI-enabled bank account.
2. While a chip-pin debit card has four factors of authentication, BHIM app has only two factors of authentication.
Which of the statements given above is/are correct?

AOptions

A
A) 1 only
B
B) 2 only
C
C) Both 1 and 2
D
D) Neither 1 nor 2

BSolution

Let's analyze the given statements regarding digital payments:

1. BHIM app allows the user to transfer money to anyone with a UPI-enabled bank account. This statement is correct. BHIM (Bharat Interface for Money) is an application based on the Unified Payments Interface (UPI) platform. UPI enables instant money transfers between bank accounts using a Virtual Payment Address (VPA), mobile number, or Aadhaar number, directly linking to UPI-enabled bank accounts.

2. While a chip-pin debit card has four factors of authentication, BHIM app has only two factors of authentication. This statement is incorrect. A typical chip-PIN debit card generally involves two factors of authentication: something you have (the card) and something you know (the PIN). Similarly, the BHIM app typically involves two factors: something you have (your smartphone with the app) and something you know (your UPI PIN, which is required for transactions). The number of authentication factors can vary based on specific security implementations, but the assertion of a four-factor card versus a two-factor app, with BHIM having 'only' two, is misleading and generally inaccurate for standard usage.

Therefore, only statement 1 is correct.

Diagram for Q28

CStrategy

For questions on modern technology and digital initiatives, focus on understanding the core functionality, security mechanisms, and user experience. Differentiate between features and underlying security protocols. Be wary of precise numerical claims regarding security factors unless they are widely established and understood.

DSyllabus Analysis

This question falls under Indian Economy (Digital Economy, Financial Technology) and Science & Technology (IT and Digital Infrastructure).

EQuestion Analysis

Medium. Requires understanding of digital payment systems like BHIM and UPI, and basic knowledge of authentication factors.