Card giant Mastercard is planning to introduce its Payments Passkey service in India, establishing biometric authentication for online shopping.
The number of scams is on the rise as OTPs prove to be unsafe
Mastercard’s Passkey service was rolled out as a pilot alongside some of India’s other largest payments players. That included Juspay, Razorpay, and PayU — some of several major payment aggregators. Apart from them, there are online merchants like bigbasket, and leading banks, including Axis Bank.
However, Mastercard’s solution came as a response to a significant increase in fraud levels when it came to the use of one-time passwords (OTP). Thanks to online scams like phishing, SIM swapping, and message interception, the OTP method of authentication became highly vulnerable and unsafe.
Specifically, India has seen a 300% increase in fraud cases over the past few years, according to the Reserve Bank of India’s (RBI) Annual Report for 2023-2024. Banks in other countries have seen similar problems, which caused some, such as the banks in Singapore, to quickly take measures to root out the use of OTPs.
Instead, they introduced digital tokens for bank account login. However, this too only came after over $14.2 million was stolen from customer accounts by phishing scammers.
Mastercard responds to the problem with a unique new solution
To combat the issue, Mastercard invented Payment Passkey — a method that uses device-based biometric authentication methods like facial scans, tokenization, or even fingerprints. Through this method, Mastercard secures the consumer’s online checkout interaction and makes sure that the transaction is safe.
No transaction data is shared with any third parties during the process, which means that it is useless to scammers and fraudsters.
Commenting on the matter, Mastercard’s chief product officer, Jorn Lambert, said that the introduction of the Mastercard Payment Passkey Service in India will allow the local authorities to improve secure online checkouts. Along the way, the method will also assist in the development of India’s vision for a token economy.
Lambert further explained that innovative technologies like this, which can enhance security and convenience, are allowing the creation of a more transparent commerce ecosystem fr everyone involved.
“As we continue to lead the way in digital payments, our commitment to achieving a tokenized future is stronger than ever,” he concluded.
After the initial pilot program in India, Mastercard has additional plans for the new payment feature. Its intention is to roll out the same service to other consumers and financial institutions, not only in India but all over the world. This will be its focus in the coming months.