The National Payments Corporation of India (NPCI), which operates UPI, IMPS and other retail payment systems, on Tuesday launched biometric authentication for UPI payments at the Global Fintech Fest in Mumbai.
Biometric authentication will be performed on-device and can be used in place of the PIN that has been in use since UPI was launched in 2016.
Launched by M. Nagaraju, secretary, department of financial services at the ministry of finance, biometric authentication is considered a seamless, secure
and user-friendly alternative to PIN-based authentication.
The biometric authentication can be used for setting or resetting the UPI PIN apart from using it for cash withdrawal at ATMs using UPI.
The facility will be made available to customers who choose to opt in, giving them control over their preferred mode of authentication, the announcement said.
“Each transaction is independently verified by the issuing bank using robust cryptographic checks, ensuring the highest level of safety while keeping the experience simple and seamless,” the NPCI said in a press release.
High-value transactions
NPCI may soon allow an Aadhaar-based face authentication mechanism for high-value financial transactions, a senior UIDAI official said on Tuesday.
“UIDAI is the foundational infrastructure. It’s the only way to surely know who is who. We have the world’s largest biometric database. We strongly advocate the use of face authentication as a modality in the multi-factor assessment,” Abhishek Kumar Singh, deputy director-general at UIDAI, said during a panel discussion at the event.
Singh said that the NPCI is already on board with this thought process and approach and is expected to make an announcement to this effect in the coming days.
Easy and secure
The introduction of biometrics for UPI payments could also make onboarding easier for senior citizens and first-time users.
“Until now, creating a UPI PIN required entering debit card details or going through Aadhaar OTP verification. With Aadhaar-based face authentication for UPI PIN, onboarding becomes faster, simpler and more inclusive for those without easy access to cards,” NPCI said.
For UPI, primary factor authentication is the device binding done through SMS, while PIN acts as the second factor authentication.
While the primary initiative on alternative payment authentication started more than three years ago, the urgency now stems from the RBI’s concern about multiple UPI scams, which happen due to PIN-related fraud.
The RBI has been nudging all financial institutions to follow different second-factor authentications instead of PINs and OTPs.