India’s digital payments ecosystem is evolving at a rapid pace. Businesses, banks, and consumers are embracing online transactions more than ever, but with growth comes complexity. Despite the convenience of card payments, nearly 35% of transactions fail due to OTP delays, incorrect entries, or redirection issues. Coupled with rising digital fraud and stricter regulatory requirements, the need for smarter, faster, and more secure authentication has never been greater.
Why Authentication Matters
Every online card payment starts with one moment of truth: authentication. It’s the first step in building trust. For businesses, authentication means confirming that the person making the payment is really who they say they are. And this is why it is important. It is the first step to a safe and secure transaction. It is the basic building block of trust in digital payments. Thanks to robust authentication,
– a cardholder trusts that their funds are safe
– a merchant trusts that the transaction will result in real payment
– and for banks, it’s protection against fraud, liability, and regulatory risk
For years, OTP-only authentication has been the industry standard, but it has limitations like delayed SMS, failed OTPs, and cumbersome checkout flows that frustrate customers and lead to lost sales for businesses. Additionally, traditional methods struggle to keep pace with the evolving threats of fraud.
Why This Matters Now
RBI Ushers in the Future of Card Authentication
RBI’s 2025 guidelines mandate stronger authentication and make banks fully liable if safeguards fail. OTP-only flows are no longer enough in a world of high-value transactions and rising fraud risk. RBI’s new framework mandates two-factor authentication, encouraging the move beyond OTP dominance towards more secure, harder-to-fake methods like device tokens and biometrics.
Two-Factor Authentication: Every domestic digital payment must be verified using at least two distinct factors of authentication, according to the RBI. These could come from:
- Something you know: Password, PIN, or passphrase
- Something you have: A card, token, or SMS-based one-time password (OTP)
- Something you are: Biometric data, such as a fingerprint or facial recognition
With the RBI’s new circular, the industry received the backing for advanced tech solutions to boost digital security and authentication. And it’s exactly what Razorpay ACS is built for.
Enter Razorpay ACS: India’s First Biometric Card Authentication
Razorpay ACS goes beyond traditional authentication. Within just 5 days of RBI’s September 2025 circular, Razorpay has introduced India’s first biometric-ready Access Control Server (ACS) – an innovation that puts fingerprint and face ID scan at the heart of every online transaction. 
- Razorpay Biometric Authentication: Built on device tokenization and advanced passkey standards, Razorpay ACS transforms card payments with seamless fingerprint and face ID authentication, delivering secure, one-click checkouts and reducing approximately 35% of OTP authentication errors.
- AI-Powered Risk Engine: With AI-powered risk checks, it keeps payments secure in real time, while ensuring smooth checkouts for users, fewer authentication failures for banks, and higher conversions for businesses.
- Conversion-Focused Checkout Page: The authentication page is reimagined with instant card controls, EMI options, and rewards – turning friction into delight. Banks are witnessing 75% fewer drop-offs, thanks to instant card control activations, affordability options, and rewards now built right in, and banks running more efficiently with faster integrations and lower costs.
- Built to Scale: Powers 10,000 TPS and delivers the highest success rate.
What it means for:
Banks
- Reduced Authentication Failures: By moving beyond fragile OTP channels, banks cut down the single largest cause of transaction failures.
- Regulatory Confidence: Fully RBI-compliant, ensuring security standards are met without risk of penalties.
- Lower Fraud Risk: Device-based tokenization and passkey protocols make fraud attempts far more difficult, reducing chargebacks and operational overhead.
- Operational Efficiency: Fewer failed authentications mean fewer customer complaints, lower call-center load, and faster activations.
Brands
- Higher Success Rates, Higher Revenue: Transactions complete without OTP delays or failures, directly improving conversion at checkout.
- Better Customer Retention: Smooth authentication builds confidence in card payments, leading to more saved cards, repeat purchases, and larger ticket sizes.
- Fewer Abandoned Carts: Eliminates friction at the most critical stage of the journey, keeping sales intact.
- Trust by Association: Merchants using biometric-ready checkout are seen as modern, secure, and customer-centric.
Shoppers
- Seamless Experience: Approve payments instantly with a fingerprint or face ID – no need to wait for OTPs or worry about network issues.
- Peace of Mind: Transactions are secured by what you are (biometrics) instead of what you know (passwords/OTPs), making fraud far less likely.
- Consistency Across Devices: Works smoothly across mobiles and browsers, bringing card payments on par with a 1-click experience.
- More Control: Faster authentication paired with bank-backed tokenization ensures both ease and safety in every transaction.
Khilan Haria, CPO, Razorpay, said, “Following the RBI’s final guidelines, we are proud to pioneer and co-create the future of card authentication in India. With Razorpay ACS, we are shaping how biometrics will work seamlessly across every card issuer and merchant in the country. This is not just about solving today’s OTP delays or fraud risks, it’s about building the next decade of digital trust, where authentication becomes invisible, intuitive, and growth-focused for businesses, while being effortless and secure for customers.”
A Proven Solution
Razorpay is already powering real partnerships at scale. Together with Yes Bank, we’re delivering future-ready authentication across the ecosystem, helping issuers reduce failures and fraud, enabling merchants to drive higher conversions, and giving customers a seamless, secure way to pay. This collaboration is setting new benchmarks for trust, security, and growth in India’s digital payments.
Anil Singh, Country Head, Credit Cards & Merchant Acquiring, YES BANK, said,
“At YES BANK, we are delighted with the performance of Razorpay ACS, which we have co-created in partnership with Razorpay. We remain committed to delivering secure, seamless, and future-ready payment experiences to our customers. The high authentication success rates and real-time fraud prevention delivered by Razorpay ACS are being widely acknowledged by our customers, further strengthening their trust and reinforcing our vision of enabling safer, smarter, and more intuitive digital payments at scale.”
Shaping the Future of Trust
Authentication shouldn’t be a barrier; it should be invisible, instant, and intuitive.
With Razorpay ACS, India’s first biometric card authentication, we’re not just fixing today’s OTP problems. We’re building the next decade of digital trust. This is the future of card authentication. And it’s here, today.
Be the first to move beyond OTPs. Explore Biometric Authentication with us at card-tokenization@razorpay.com. You may connect with your Account Manager if you’re already on Razorpay.
