Because frictionless payments boost transaction velocity, they facilitate economic development. One step in that direction is biometric-enabled authentication, and in the next months, we should be able to see the effects of the expansion. So simply pay it forward with a grin.
Instead of manually entering the personal identification number (PIN), users of the Unified Payments Interface (UPI) may now authenticate transactions using their devices’ fingerprints or facial scans. According to Vivek Iyer, this provides the much-needed efficiency that may boost the economy’s development by increasing transaction velocity.
How has UPI operated so far?
It is necessary to submit a Personal Identification Number (PIN) in order to authenticate or authorize payments made using third-party UPI apps. This has been the sole option up to this point. Payments made via digital applications need authentication to confirm the identity of the payer.
What is wrong with authentication based on PINs?
Phishing and malicious websites that, when visited, might compromise your personal information, including your PIN, have led to an increase in UPI-related scams. Other scams that have compromised the PIN as an authentication method include SIM cloning and fake QR codes. This made it necessary to switch to a new authentication method for digital payments based on UPI.
Biometric authentication: what is it?
Using your fingerprint or face as a legitimate credential to make payments is known as biometrics-based authentication. while combined, the terms “bio” and “metric,” which relate to the human body and a measure, respectively, denote the use of a bodily component as a means of verification while making a payment.
Do consumers like the new authentication method?
The aspects of client security and convenience hold the key to the solution to this query. Customers find face-based or fingerprint-based identification to be very handy since they do not have to remember their PIN in order to make a purchase.
Because biometric credentials are unique and cannot be copied, biometric-based authentication also provides a high degree of client protection. Additionally, the availability of biometric-based credentials makes it very user-friendly for elderly individuals and clients with low reading levels, facilitating the wider democratization of the payment ecosystem across the nation’s hinterland.
Only for payments, is that right?
Debit card information and Aadhaar OTP are no longer required when creating or resetting the UPI PIN thanks to Aadhaar-based facial authentication. Senior folks and other first-time users will find it quite simple as a result.
Effects on the Economy
Any economy’s ability to grow depends on how well the real economy and the financial services ecosystem interact. The financial services sector determines the multiplier impact of growth, whereas the real economy determines the growth’s quantum. Payments innovation provides the much-needed efficiency that multiplies growth. It is important to understand the current developments on UPI authentication in this perspective.
Will the value and number of UPI transactions increase as a result of this innovation?
Increases in transaction volume and value might contribute to UPI growth. Platform security levels determine value, which often happens when volumes rise and fraud levels fall within a manageable range. At this point, we must democratize transactions for all client segments, young and elderly, in order to boost transaction volumes. Providing customers with ease with improved security measures ensures the same, which is why biometric-enabled authentication is the solution.
Because frictionless payments boost transaction velocity, they facilitate economic development. One step in that direction is biometric-enabled authentication, and in the next months, we should be able to see the effects of the expansion. So simply pay it forward with a grin.