Federal Government bank introduces biometric identification system for digital payment card transactions
In a groundbreaking move, Federal Bank, in collaboration with fintech firms M2P Fintech and MinkasuPay, has launched India's first biometric authentication solution for e-commerce card transactions. This innovative initiative allows Federal Bank debit and credit card holders to authenticate online purchases using their device’s built-in biometrics such as fingerprint or Face ID instead of traditional One-Time Passwords (OTPs).
How it Works
When a customer shops on select partner merchants’ websites or apps, they select their Federal Bank card and opt to pay. During checkout, the system prompts biometric authentication using the customer’s smartphone—fingerprint scan or facial recognition. The biometric data is verified using the phone’s secure biometric sensors and hardware security modules. This process replaces OTP verification, thus eliminating the need to receive and enter an SMS code.
The system still complies with Reserve Bank of India’s mandated Two-Factor Authentication (2FA) by applying two factors: something the user has (the registered device/card) and something the user is (biometric identity). If biometrics fail or are not set up on the device, the system falls back to the OTP method.
Key Benefits
The key benefits of this solution include:
- Significantly faster transaction times: reduced from around 30 seconds with OTPs to just 3–4 seconds using biometrics.
- Enhanced security by leveraging device-level biometric authentication, reducing fraud risk.
- Improved customer convenience and seamless checkout experience.
- Higher success rates and fewer transaction failures due to eliminating OTP delivery delays or errors.
Compliance and Availability
The biometric solution is fully compliant with RBI's Two-Factor Authentication guidelines. It works across compatible Android and iOS smartphones. Customers can enroll with a one-time consent during checkout and use the feature seamlessly on supported merchant apps.
The innovation is currently live for Federal Bank debit and credit cardholders across select partner merchants and will be expanded in a phased manner. The biometric authentication solution for e-commerce card transactions, introduced by Federal Bank, is more than just a tech upgrade; it's a transformation in customer banking experience.
[1] Press note issued by Federal Bank highlights the benefits of the new biometric authentication solution. [2] The solution is designed to combine simplicity with enhanced security for users. [3] The biometric solution is expected to improve the security of online transactions. [4] The new solution replaces One-Time Passwords (OTPs) in transactions.
- Federal Bank's biometric authentication solution for e-commerce transactions, in collaboration with M2P Fintech and MinkasuPay, is live and offers a transformation in customer banking experience.
- This innovation for debit and credit card holders aims to combine simplicity with enhanced security, reducing transaction times significantly.
- By leveraging device-level biometric authentication, the solution minimizes fraud risk and offers improved customer convenience.
- The biometric solution is compliant with the Reserve Bank of India's Two-Factor Authentication guidelines and works across Android and iOS smartphones.
- The innovation is expected to Revolutionize the finance industry by promoting live security in e-commerce transactions, reducing reliance on One-Time Passwords (OTPs).
- This new technology has massive potential to streamline the banking, business, technology, energy, and markets, creating a seamless experience for customers while ensuring secure transactions.
