As OTPs become irrelevant in India starting tomorrow due to RBI new payment security policies, Razorpay, one of the local market leaders in digital payment processing, is introducing regulation compliant biometric authentication for card payments, in partnership with Mastercard and Visa.
The official update announcement comes on the heels of the Reserve Bank of India’s “Authentication Mechanisms for Digital Payment Transactions Directions, 2025” rule, effective April 1, 2026, which replaces a decade of users’ SMS OTP dependency with a flexible, biometric-ready framework for online checkouts.
RBI New Compliance Regime for Biometric Transactions
The regulation enforces two-factor authentication (2FA) for all domestic digital payment transactions, including UPI payments. With its coming into force, customers making UPI transactions to cover purchases up to ₹5,000 can opt to use device-based biometrics instead of manually entering their PIN.
Card payment landscape is also changing for the demand of biometric innovations. From now on, non-card-present (CNP) transactions, which include virtually all online shopping payments, at least one of the two verification factors must be dynamic. It must be, tehrefore, unique to that specific transaction and invalid for any subsequent use.
While one-time SMS OTP code also serves that purpose, biometric match performed in real time is often easier and quicker to make. Since the new law explicitly allows and encourages in-app biometric prompts, device-bound tokens, and QR-code-based approvals as valid authentication factors, their use is expected to grow exponentiallyy.
Razorpay Infrastructure Supports Biometric Card Payments at Scale
In preparation for the new payment verification standards, Razorpay launched a biometric-card-authentication system for online card payments in late 2025. Razorpay ACS (Access Control Server) lets customers authenticate a card payment using device biometrics (fingerprint or Face ID) or other strong auth methods.
In partnership with Visa and Mastercard, the two most used card networks globally, Razorpay boosts in-app biometrics usability, elevating it to practically universal level. The absence of necessity for OTPs and passwords is expected to significantly reduce checkout friction for customers. Partners believe it will lead to fewer cart drop-offs, higher transaction success rates, and also stronger security for online shopping payments.
How Biometric Authentication Boosts Sales in Practice
Their suggestions are supported by recent research data. For instance, mobile cart abandonment rate drops from 85.65% to 71.2% when biometric one-tap checkout (enabled by either Face ID or fingerprint) is used. To better understand the scale of impact, one must realize that around 60%-73% of all e-commerce sales today are made via mobile devices (smartphones and tablets). Meanwhile, 80-90% of all card-based online transactions globally are facilitated with Visa and Mastercard. This way, biometric checkout finale conducted by Visa, Mastecard and Razorpay would actually affect the majority of online purchases.
