Online payments have become faster than ever, but authentication remains one of the biggest sources of friction at checkout. Visa’s launch of Payment Passkey in India with IDFC FIRST Bank signals a significant evolution in digital payment security by replacing SMS-based OTPs with biometric authentication built directly into consumers’ devices. The rollout reflects a broader industry shift toward passwordless, phishing-resistant payment experiences that improve both security and convenience. As digital commerce expands and AI-powered shopping experiences emerge, stronger identity verification will become a critical foundation for the next generation of payment infrastructure.
Global payments technology major Visa Inc. (NYSE: V) has announced the commercial launch of its Visa Payment Passkey (VPP) solution in India. Developed to replace vulnerable, legacy One-Time Passwords (OTPs) with secure, device-native biometric authentication, the infrastructure has gone live with IDFC FIRST Bank as its inaugural issuing partner. The deployment marks a major shift in India’s e-commerce ecosystem, allowing cardholders to authorise digital transactions with a fingerprint scan, facial recognition, or a device PIN rather than waiting for an SMS-delivered code.
The rollout directly aligns with the Reserve Bank of India’s (RBI) modern digital policy directives, including the formalised Framework on Alternative Authentication Mechanisms for Digital Payment Transactions. While the RBI mandates strict two-factor authentication (2FA) for all digital retail card transactions, traditional OTP verification has increasingly become a severe operational bottleneck. It introduces high checkout friction due to delayed SMS delivery and weak carrier network connectivity, while also exposing consumers to sophisticated social engineering, SIM-swapping, and phishing scams. VPP utilises global Fast Identity Online (FIDO) standards, where a user’s biometric unlock signs a localised cryptographic challenge that is verified instantly by the issuer, eliminating the risk of interceptable text-based codes.
To establish immediate network scale, Visa has integrated its passkey layer across a broad spectrum of major domestic consumer applications and high-volume merchant aggregators:
- Live Retail Outlets: The feature is initially available to select cardholders transacting across major digital platforms including Myntra, Paytm, MakeMyTrip, Tata Starbucks, Reliance Digital, and Rebel Foods’ EatSure.
- Fintech Orchestration Nodes: Technical integration and merchant onboarding are supported via unified API linkages across India’s largest payment gateways, including Juspay, Wibmo, Razorpay, PayU, Pine Labs, BillDesk, M2P Fintech, and Paytm Payments Services.
The integration delivers an immediate 2% to 3% uplift in transaction success rates by removing manual entry errors and redirect loop drop-offs. Because India has already achieved 100% card tokenisation for online transactions, where sensitive 16-digit card numbers are masked by secure digital tokens, the addition of FIDO-compliant passkeys creates an exceptionally secure, dual-layered cryptographic checkout environment. Suresh Sethi, Group Country Manager for India & South Asia at Visa, stated that VPP builds a seamless checkout experience while establishing the necessary foundational identity rails for future “agentic commerce,” where trusted, pre-authenticated credentials will allow autonomous artificial intelligence assistants to safely execute online transactions on behalf of verified consumers.
What it means for the industry
- The era of OTPs is beginning to fade. Biometric authentication and passkeys are emerging as a more secure, user-friendly alternative to SMS-based verification for online card payments.
- Higher payment success rates benefit everyone. Reducing checkout friction can improve transaction completion, increase merchant revenues, and create a smoother customer experience.
- Passwordless authentication strengthens fraud prevention. FIDO-based cryptographic verification significantly reduces exposure to phishing, SIM-swapping, and other social engineering attacks that exploit OTPs.
- Banks will increasingly compete on authentication experience. As digital banking matures, seamless and secure payment journeys will become an important differentiator for card issuers and financial institutions.
- India continues to set the pace in payment innovation. Following large-scale tokenisation and real-time payments, the adoption of payment passkeys further reinforces India’s position as one of the world’s most advanced digital payments markets.
- The foundations for AI-driven commerce are being established. Trusted digital identities and secure authentication mechanisms will be essential as AI assistants and autonomous agents begin participating in consumer purchasing and payment workflows.
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