No more OTPs or PINs? India embraces biometric transactions

Is the era of One-Time Passwords (OTP) over? If you go by this latest launch in the fintech space, it seems the answer is a definitive yes. A new feature has been rolled out both in the credit card and UPI segments, and in case of credit cards it has the potential to make OTPs obsolete.

No OTP for Credit Cards

In the credit card segment, the big feature rollout has come from Razorpay, one of the top fintech platforms that enable Business-to-Business (B2B) payments. Razorpay has tied up with Yes Bank to roll out biometric authentication of credit card transactions.

Speaking to ANI in Mumbai, Harshil Mathur, CEO of Razorpay Software Limited, explained the rationale behind this new feature. He said that while OTPs had helped widen the adoption of online credit card payments, making transactions more secure, there was one challenge with OTPs.

The OTP challenges

Talking about those challenges, he added, “Sometimes it (OTP) does not come on time. Sometimes the network does not work. There is a dependency and lag, due to which approximately 5 to 10% of transactions fail because of OTP verification.”

Biometric authentication for transactions

The Razorpay CEO also explained how biometric authentication was going to work for credit card transactions. He said, “Yesterday, we launched biometric authentication, with Yes Bank as its first partner. Now, when you make a payment using a credit card, instead of an OTP, you simply need to show your face, and the transaction will be completed through Face ID. If your phone has a fingerprint sensor, then it will be done through that.”

Harshil Mathur also talked about the other advantages of biometric authentication, especially in the context of enhanced security of transactions. He said, “Now, biometric authentication is more secure. The OTP option is susceptible to card scamming, etc. No one can ask for your face. Face ID is stored locally on your mobile device, so the data doesn't travel. And more importantly, the success rate is 10% higher.”

Next generation of payments

Calling this new feature “the next generation of payments”, the Razorpay CEO added that it will not only bring India up to par with the rest of the world but also put it ahead in terms of how payments are authorised.

UPI biometric feature

The rollout of biometric authentication by Razorpay for credit cards coincides with a similar rollout for UPI payments by the National Payments Corporation of India (NPCI). The payments organisation unveiled this feature at the 6th Global Fintech Fest, which is currently underway in Mumbai.

Biometric authentication for UPI does away with the need for a PIN. It allows users to authenticate their transactions using their Face ID or fingerprint, if they have a fingerprint sensor on their phones. NPCI says this makes transactions faster, smoother and more secure.