In a bid to encourage cashless economy, the Reserve Bank of India has waived off two-factor authentication for small value transactions to make it easier and faster.

The RBI said that it has been receiving requests from certain segments of the industry for reviewing the requirement of additional factor authentication for low-value online card-not-present (CNP) transactions. 

Reacting to the news, payment companies have applauded the central bank for the move. 

"This will greatly improve the success rate of online transactions, which will grow both online commerce and cashless payments in India," Govind Rajan, CEO of digital wallets firm FreeCharge said. 

While, Mrinal Sinha, Chief Operating Officer, of digital payments firm MobiKwik said that India's number of card holders and users differ significantly, RBI's move will help us to fill the gap.

"It will accelerate adoption of card payments and will increase consumer convenience so that they use cards more often. Larger number of users will be able to do digital transactions after this, Vijay Shekhar Sharma, Founder & CEO - Paytm said.