MUMBAI: The National Payments Corporation (NPCI) has launched a biometric authentication for UPI payments instead of the present PIN-based system.
The biometric authentication will be performed on-device and can be used in place of the PIN that has been in use since the popular digital payments system was launched in April 2016.
The new tool was rolled out by M Nagaraju, financial services secretary, at the global fintech summit here Tuesday.
A biometric authentication is a more seamless, secure and user-friendly alternative to PIN-based UPI authentication and can be used for setting or resetting the PIN apart from using it for cash withdrawal at ATMs using UPI.
The facility will be made available to customers who choose to opt in, giving them control over their preferred mode of authentication, the NPCI said.
“Each transaction is independently verified by the issuing bank using robust cryptographic checks, ensuring the highest level of safety while keeping the experience simple and seamless,” the NPCI release said.
The introduction of biometrics for UPI payments could also make onboarding easier for senior citizens and first-time users.
“Until now, creating a PIN for UPI required entering debit card details or going through Aadhaar OTP verification. With Aadhaar-based face authentication, onboarding becomes faster, simpler, and more inclusive for those without easy access to cards,” NPCI said.
For UPI, primary factor authentication is the device binding done through SMS, while customers enrol for UPI on their mobile devices and the PIN acts as the second factor authentication.
While the primary initiative on alternative payment authentication started more than three years ago, the urgency now stems from the Reserve Bank’s concern about multiple UPI scams that keep happening because of PIN-related fraud.
The central bank has been nudging all financial institutions to follow different second-factor authentication instead of PIN and OTPs, such as behavioural risk patterns and biometrics, over other means as of now.
The UPI is the most popular digital payment method in the country controlling 85% of all online transactions. The mobile payments platform enables around 20 billion transactions every month worth over Rs 25 trillion.
Earlier, addressing the summit, finance minister Nirmala Sitharaman said the country is leading in the digital payments system worldwide with half of the world’s total real-time digital transactions taking place in the country.
"Half of the world's real-time digital transactions are happening in our country alone with an adoption rate of 87% as against the world average of 67%. We processed over 18,580 crore of UPI transactions worth Rs 261 trillion in financial year 2025," she said.
