NPCI may do away with OTPs, PINs for UPI transactions

Mumbai: The National Payments Corporation of India (NPCI) has discussed partnerships with startups to introduce biometric authentication for UPI transactions.

The move followed RBI's proposal for alternative authentication methods to enhance security and user experience, sources said.

The proposed system will allow users to authenticate UPI payments using fingerprints on Android devices and face ID on iPhones, replacing the current four or six-digit UPI PIN.

The move towards biometric authentication aligns with the RBI's preference for more secure verification methods to combat financial fraud. By leveraging the built-in biometric capabilities of modern smartphones, NPCI aims to enhance the security and user experience of UPI transactions.

The central bank suggested exploring options beyond PINs and passwords, including biometrics such as fingerprints.

Sources said that NPCI’s discussions with startups are focusing on the financial and legal aspects of potential partnerships.

Initially, both PIN and biometric authentication methods are likely to coexist, providing users with multiple options for transaction verification, the sources said.

Currently, UPI uses a two-factor authentication system. The primary factor involves device binding through SMS when users enroll for UPI on their mobile devices.

The secondary factor is the UPI PIN, which users must enter to confirm transactions. If implemented, this change could make it easier for people to make payments and make it even further secure.