Mastercard has chosen India as the launchpad for its Payment Passkey Service, a new way of conducting online transactions, marking a significant step in the global payments landscape.
The new service will initially pilot in India with some of the country’s largest payment players, including payment aggregators such as Juspay, Razorpay, and PayU, along with major online merchants like bigbasket and leading banks such as Axis Bank, Mastercard said in a statement.
Unlike traditional one-time passwords (OTPs), which have become increasingly vulnerable to phishing, SIM swapping, and message interception, payment passkeys utilise biometric data stored on a user’s device to authenticate transactions. This not only speeds up the checkout process but also adds a layer of security that is believed to be much harder for fraudsters to bypass.
The company said this service, announced at the Global Fintech Fest in Mumbai, is “designed to enhance the security and ease of online shopping” by leveraging biometric authentication and tokenization.
“By introducing the Mastercard Payment Passkey Service in India, we’re advancing secure online checkout and our vision for a token economy,” Mastercard’s chief product officer, Jorn Lambert said in the statement. “Through innovative technology that enhances security and convenience, we’re creating a more transparent commerce ecosystem for all.”
Mastercard had announced Payment Passkey service, part of its Biometric Authentication Service, in January this year, but the service had not been rolled out into its operating markets before now.
India’s digital payment ecosystem is one of the fastest-growing in the world, driven largely by the government’s push for a cashless economy and the meteoric rise of the Unified Payments Interface (UPI). UPI has revolutionised digital transactions in India by providing a real-time payment system that has quickly gained popularity among consumers and merchants alike.
As of 2024, UPI transactions have soared to over 10 billion per month, dominating the digital payments market and posing a competitive threat to traditional payment networks like Mastercard and Visa.
“Mastercard’s decision to introduce its Payment Passkey service first in India is a strategic move that aligns with several key market trends and opportunities,” Pranati Dave, practice director at Everest Group, said. “India is one of the world’s fastest-growing digital payment markets, with a rapidly expanding user base for online and mobile transactions.”
