Global payments technology company Visa has officially launched passkey authentication in India, marking a significant shift from the traditional one-time passcode (OTP) system for digital card transactions. This initiative, beginning with IDFC First Bank, promises to make online payments both faster and more secure for consumers.
Enhanced Security and Speed for Digital Payments
The introduction of passkeys allows Visa card users to authenticate financial transactions using biometric identity—such as fingerprints or facial recognition—or a unique PIN or pattern set on their smartphone. This method is touted as a superior alternative to OTPs, which, while easy to implement, are vulnerable to phishing and other fraud schemes.
Ramakrishnan Gopalan, Head of Products for India and South Asia at Visa, emphasized the need to move beyond OTPs. “You are not using OTP to unlock your phone. You are using your own biometric identity… Authenticating payment transactions shouldn’t be different,” Gopalan stated, highlighting the advanced security offered by passkeys.
RBI Mandate and Broader Adoption
The Reserve Bank of India (RBI) has mandated two-factor authentication for digital transactions since April 1, requiring methods like OTPs, passwords, or biometrics. Visa's passkey system aligns with this mandate while providing a more robust and user-friendly experience.
Initially, Visa Payment Passkey is live with IDFC First Bank and will soon be available to select users of major merchants including Myntra, MakeMyTrip, Paytm, Reliance Digital, Tata Starbucks, and EatSure, alongside various fintech partners. This expansion is expected to simplify the checkout process and strengthen transaction security across a wide range of online platforms.
Beyond Passkeys: Visa's India Strategy
Beyond the passkey rollout, Visa is also exploring broader market initiatives in India. The company is developing low-cost point-of-sale (POS) devices to make card acceptance more accessible for small and medium-sized merchants. Additionally, Visa is investigating the possibility of transforming NFC-enabled smartphones into POS devices, allowing merchants to accept tap payments directly on their phones.
On the consumer side, Visa is working to expand its customer base by offering secured credit cards, backed by fixed deposits, for new entrants to the workforce or those who may not qualify for standard unsecured cards. These efforts underscore Visa's commitment to growing the digital payments ecosystem in India, a market currently dominated by the homegrown Unified Payments Interface (UPI).