NPCI rolls out UPI payments with fingerprint and face authentication instead of PIN

Better than PIN

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 release said.

For new users, senior citizens

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 customers enrol for UPI on their mobile devices and the PIN acts as the second factor authentication.

Security and payment fraud concerns

While the primary initiative on alternative payment authentication started more than three years ago, the urgency now stems from the Reserve Bank of India’s concern about multiple UPI scams that keep happening because of PIN-related fraud.

RBI has been nudging all financial institutions to follow different second-factor authentication instead of PIN and OTPs, such as behavioural risk patterns and biometrics, over other means as of now.

In the works for long time

In 2021, the NPCI held a hackathon called NPCI PayAuth Challenge for startups to come up with various alternative authentication methods. The startup winners included Tech5, payment processor Juspay, MinkasuPay and Infobip.

The startups were allowed to present a proof of concept (POC) to the UPI Steering Committee, which comprises several banks and UPI apps. While Tech5 and MinkasuPay made their presentations, banks preferred MinkasuPay as it did not require the issuing banks to make any major changes.

The UPI is the most popular digital payment method in the country controlling 85 percent of all online transactions. The mobile payments platform enables around 20 billion transactions every month worth over Rs 25 lakh crore.