PayU embraces native device biometrics to meet India’s authentication mandate

PayU, a digital financial services provider in India, has introduced Flash Pay, a biometric authentication solution for mobile digital payments, and partnered with Mastercard to introduce passkeys for payments to the Indian market.

Both the new Flash Pay system and payment passkeys enable customers to authenticate using native device fingerprint or face biometrics instead of the traditional one-time password (OTP) method.

In response to the recent mandate by the Reserve Bank of India for an additional authentication factor, which can include passwords, software tokens, or biometrics, PayU states that Flash Pay aligns with the policy. It allows merchants and banks to improve their authentication processes without requiring extensive changes.

PayU is a subsidiary of Netherlands-based Prosus, and serves more than 800,000 SMBs in India.

While biometrics serve as the primary authentication mode for Flash Pay, the system can fall back on SMS OTP if necessary. Flash Pay biometric system is accessible through software development kits (SDKs), APIs, and web-based platforms. Moreover, banks can integrate Flash Pay with the existing access control servers for OTP verification.

“We fully recognize the potential and impact of multi-factor authentication (MFA) in unlocking opportunities for innovative and secure payment solutions, all while maintaining the highest levels of customer trust,” says Manas Mishra, chief product officer at PayU.

Flash Pay utilizes the device’s biometric sensor for transaction authentication to enable the software to function. The system operates in accordance with EMV 3-D secure protocols to ensure compliance with global standards for online card payments. It comes with a fraud risk management engine that allows banks and merchants to monitor the risk associated with each transaction.

According to PayU, implementing biometric authentication will help address concerns regarding delays and failures in receiving OTPs, and will also reduce the risk of fraud resulting from OTP sharing. The Ministry of Home Affairs, in collaboration with SBI Cards, is developing a solution to notify users about stolen OTPs, with the objective of combating the threat of cyber fraud.

Mastercard partnership for payment passkeys and protection

PayU is also one of Mastercard’s launch partners for the introduction of passkeys for payments in India, along with Juspay and Razorpay. Mastercard’sPayment Passkey Service offers a digital payment method with passwordless authentication.

OTPs have grown in popularity as an authentication method for payments in India, but this adoption has coincided with a 300 percent increase in fraud cases over the last two years, according to RBI statistics quoted by Mastercard. The partners expect the use of device biometrics for passkey authentication to make transactions more secure, while also improving speed and convenience.

The partnership with Mastercard also includes collaborations on cross-border payments and the Brighterion AI fraud detection solution.

“As the country’s payment ecosystem matures, the demand for advanced and secure payment solutions is greater than ever,” says Mishra.

Further expanding its presence in the digital transactions space in India, PayU has collaborated with Amazon Pay Later to provide digital credit to online shoppers. The company has also developed the PayU prepaid payment instrument issuance stack, which aims to help merchants retain customers by facilitating loyalty programs.

Article Topics

biometric authentication  |  biometric payments  |  biometrics  |  India  |  Mastercard  |  passkeys  |  PayU