The National Payments Corporation of India (NPCI) is reportedly discussing partnerships with several startups to introduce biometric authentication for Unified Payments Interface (UPI) transactions.
According to sources familiar with the matter, as reported by MoneyControl, the proposed system would 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.
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This development comes just a week after the Reserve Bank of India (RBI) proposed alternative methods for additional factor authentication (AFA) in digital transactions. The central bank suggested exploring options beyond PINs and passwords, including biometrics such as fingerprints.
According to the report, 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 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.
Currently, UPI uses a two-factor authentication system. The primary factor involves device binding through SMS when users enrol for UPI on their mobile devices. The secondary factor is the UPI PIN, which users must enter to confirm transactions.
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While the timeline for implementation remains unclear, If implemented, this change could make it easier for people to make payments and make it even further secure.
