The digital payments ecosystem in India is poised for higher transaction success rates as new two-factor authentication methods, including biometrics and passkeys, gain traction. These device-tied authentication methods are expected to improve transaction success by 2–3 percentage points, addressing the common failure issues associated with one-time passwords (OTPs).
OTP-based verification has long been a source of friction in digital payments, often failing due to delayed delivery, network issues, or incorrect entry by users. By contrast, authentication methods linked directly to a user’s device, such as fingerprint scans, facial recognition, and secure passkeys, streamline the payment process and reduce the likelihood of errors. This shift enhances reliability, customer experience, and trust in digital payment platforms.
Experts note that adopting biometrics and passkeys also strengthens security, making it more difficult for unauthorized users to access accounts or execute fraudulent transactions. As financial institutions and payment service providers integrate these technologies, the industry expects a reduction in transaction failures and disputes, leading to smoother operations for merchants and customers alike.
The move aligns with broader trends in fintech innovation, where seamless and secure authentication is becoming a critical differentiator. Payment platforms are increasingly investing in AI-driven fraud detection and advanced cryptography to complement device-based authentication, ensuring that digital transactions remain both fast and secure.
As the adoption of these methods grows, users can expect faster checkout experiences, reduced dependency on mobile networks for OTP delivery, and fewer failed payments. Industry stakeholders see this transition as a significant step toward improving digital financial inclusion and enhancing the overall efficiency of India’s payments ecosystem.
The integration of biometrics and passkeys is expected to reshape digital payments in India, making them more user-friendly, secure, and reliable, while encouraging wider adoption across urban and rural segments.
