According to a report in the Times of India, Flipkart has already done so and others like Swiggy and ride-sharing apps are about to follow. The central bank has allowed banks to facilitate transactions without OTP for online transactions so long as the merchant can verify the customer.
Puneet Jain, senior vice president in charge of Paytm’s payment gateway, told the publication that his company was empowering merchants to accept credit card payments without OTP, subject to a one-time consent.
Worth mentioning here is that last Friday, RBI, the banking regulator in the country, allowed digital wallet operators to make regular bill payments on behalf of their customers through the UPI interface through a one time mandate.
Paytm’s payment gateway, which is a part of One97, claims to have 40% market share in volume of transactions. It is the largest gateway on e-commerce platforms such as IRCTC and food delivery and lifestyle apps.
Visa has facilitated checkout without OTP by developing ‘Visa Safe Click’ which uses other factors like device authentication to make the process more seamless, T R Ramachandran, India head of the payments company told the daily. “While it may not require OTP it uses other forms of second-factor authentication and eliminates points of friction, such as cart abandonment, connectivity and incorrect passwords, and transforms the payment experience into a faster, secure and seamless one,” he said.
According to Puneet Jain, recurring payments have increased suddenly in India as more and more people opted for one-time mandates to pay for streaming services every year. “Another use case that is building up is for pre-authorised payments. This facility enables customers to book a service like a bike rental where the amount is debited after the usage,” said Jain. Earlier it was the startup which took the risks as there was little it could do if the card was declined after the service. With pre-authorisation, they do not face any such risk.