Your shopping cart is full and you are ready to check out, but when you click pay, you’re greeted by the “enter OTP" message and your phone chimes in the next room! Or you wait with phone in hand, and no OTP appears. When you’re doing your last minute Diwali shopping, even stopping to enter the one-time password to complete the transaction can seem cumbersome and frustrating. To make the payment process simpler and faster, Visa recently unveiled Visa Safe Click (VSC), which is designed to be a “frictionless payment solution" for online payments. Simply put, VSC eliminates the need for a two-factor authentication using OTP for online transactions of under ₹2,000. “It provides merchants with a network-based authentication solution that rides on Visa’s secure network rails. It uses the global EMVco 3DS (3D Secure) protocol to register a card into the solution on a trusted personal device, for instance, their smartphone," said Arvind Ronta, head of products, India and South Asia, Visa.
According to T.R. Ramachandran, group country manager, Visa India and South Asia, digital payment success rates in India are trending below 80%, resulting in suboptimal consumer experience and a revenue loss for the e-commerce industry. Indian e-commerce merchants are grappling with an ever-growing number of consumer issues such as cart abandonment, connectivity and incorrect passwords during the payment leg of their transaction. A statement by the company said that Safe Click would help merchants handle larger transaction volumes during peak sale periods, and the faster checkout time will ensure that more shopping carts getting fulfilled.
While Visa is the first among card networks to unveil such a solution, there are other payment services, too, that allow you to make transactions without an OTP. For instance, if you install a unified payment interface (UPI) app like Bhim and link your bank account to it, you will not need to enter an OTP each time you transact. You will just have to set your UPI pin when you start using the app, and you can use it for making transfers and payments without having to wait for an OTP.
Paytm also allows you to link third party platforms like BigBasket, Swiggy, Zomato, eBay, among others, with the help of an OTP. Once you have registered the payee or platform, you can make payments without entering an OTP each time. Apps like Ola, which have their own wallets, also let you put money into them without the OTP authentication process.
However, all online transactions that can be carried out without an OTP must be of under ₹2,000, as mandated by RBI. Following demonetization in 2016, RBI had received several requests from stakeholders to review and relax the requirement for two-factor authentication for low value transactions. The regulator decided to relax the OTP rules for online transactions (also known as Card Not Present transactions) of under ₹2,000 in December 2016.
The move was a welcome one for the online payment landscape. “Non-OTP transactions enable consumers to make payments in a recurring mode rather than at repeatedly regular intervals. It has also opened up avenues for more industries where OTP transactions do not work. Services like subscription, content and software as a service (SaaS) can accept payment more seamlessly now," said Harshil Mathur, co-founder & CEO, Razorpay.
But as convenient as they are, one-click transactions can tempt you to spend more. The fact that the amount is limited to ₹2,000 does help, but it’s wise to be cognizant of whether you really need what’s in your cart, before you check out.