Central Bank of Iran mandates OTP for electronic check security

The Central Bank of Iran has issued a directive mandating the use of one-time passwords (OTP) to enhance the security of electronic and paper check transactions. This measure aims to facilitate the use of electronic checks and improve the overall security of the banking system.

For legal entities, the OTP serves as a secondary method for applying corporate seals to electronic checks, providing an alternative to hardware tokens or electronic certificates. This approach addresses logistical challenges and costs associated with physical tokens and certificate distribution. To ensure security, the OTP must be sent to a SIM card linked to the legal entity or the authorized operator, with mobile numbers verified against national identification systems.

Additionally, the use of OTPs is now required for non-face-to-face operations involving the transfer of both paper and electronic checks, as well as for determining the status of electronic checks. Banks are obligated to implement these security protocols to prevent unauthorized access and mitigate potential risks during these financial processes.