If there is one thing the payment ecosystem obsesses about, it is ‘Success Rates’. This is because success rate has a direct impact on customer experience and revenue.

What is success rate for payments?

Success rate for payments refers to the number of successful transactions over total attempted transactions. Success rate is a critical criterion for all businesses; even a small dip could result in a compromised customer experience and revenue loss.

As a payments company, our singular focus has been to enhance customer experience by improving success rates. In this ongoing effort, our latest experiment was the implementation of ATM PIN instead of OTP/3-D secure PIN as 2FA (two-factor authentication) for debit card transactions.

The basic idea is that validating payments via ATM PIN requires fewer hops than 3-D secure PIN (validated through OTPs), hence more efficient.


Flow 1.png

Essentially, this makes ATM PIN-based transactions closed looped or on-us transactions. On-us transactions are where the acquirer and card issuer are the same entity. Removing two entities from the transaction flow makes the entire process more streamlined, time efficient, leading to higher success rates.

How ATM PIN Reduces Friction

Apart from enabling higher success rates, ATM PIN-based transactions are also convenient from the end customer standpoint. In terms of context, ATM PIN for online transactions is very similar to using a card at a physical store.

All that an end customer needs are – a card number, CVV and ATM PIN. Also, bad network and glitches in the bank’s SMS gateway are no longer pain points.

Rollout Plan

As much as we believed in the sheer potential of ATM PIN as a feature, we wanted to validate it through data. Part of our roll-out plan was to first test the feature across a sample set and measure success before we go the whole hog.

We also wanted to ensure that the transition to this new feature was seamless. Businesses who were part of the sample set got the feature update without having to make any change to their existing integration. The checkout directly went from the standard OTP option to include both the OTP as well as the ATM PIN option with zero intervention from businesses.

Week One

We kicked off Week One by rolling out the feature to a sample set of 50 randomly selected businesses. The ground rules to minimise the bias were:

  • Business size – an equal mix of small, mid-size and large businesses.
  • Average Ticket size – segmented as bucket one (Rs 1.00 – Rs 100), bucket two (Rs 100 – Rs 1000) and bucket three (Rs 1000 to Rs 5000).
  • Outliers and exceptions (like low transaction volumes) were removed from the list to remove potential skews to the average.

The key metrics we planned to analyse through this experiment were – success rates and customer preference for the ATM PIN option on checkout.

And, here’s what we saw at the end of Week One

  • Success rates increased by 3% for the ATM PIN feature when compared to the OTP feature.
  • The customer preference for the ATM PIN option over the OTP option was around 9.2%.

While the success rate needle didn’t move too much, the customer preference for selecting the ATM PIN option validated that we were on the right path.

Week Two

Given the outcome from Week One, we continued our experiment through Week Two, and the results just reiterated our belief. Hence, we tweaked our sample set to include 50 new businesses, making the total count 100.

The insights at the end of Week Two were:

  • Success rates continued to grow from 2.5% to 3.1%.
  • Customer preference moved from 9.2% to 12.4%.

Given the consistent uptick both for both success rates and the customer preference, we decided to keep the experiment running for a couple of weeks more to understand the impact of the ATM PIN feature better.

Week Ten

At the end of Week Ten, we saw a staggering increase in success rates. The average increase in success rates was around 10%, with few businesses observing as much as a 16% increase in success rates. As far as customer preference goes, we noticed that nearly 28% of customers consciously chose the ATM PIN option over the OTP option on checkout.

ATM PIN graph.png

With the increase in success rates, our chargebacks and refunds also noticed a dip, improving the overall efficiency.

Given the significant impact of the ATM PIN feature, we have now enabled the feature to 8,000 businesses.

What Next?

ATM PIN as a feature has been nothing short of stellar in its performance and ease of use. We plan to extend the feature to all our customers and make ATM the default option once there is a majority preference for the ATM PIN option by end customers.

If you are a Razorpay customer and do not have the ATM PIN option on your checkout, sit tight, it’s coming to you real soon! And, for all other business out there, here’s another reason to sign up with Razorpay 🙂