Razorpay, YES BANK Launch RBI-Approved Biometric Verification for Online Transactions

Razorpay, in collaboration with YES BANK, has introduced India’s first biometric card authentication system for online payments that complies with Reserve Bank of India (RBI) guidelines. This new system allows card transactions to be verified using facial recognition, moving away from traditional two-factor authentication methods that relied on PINs and SMS OTPs.

Introduction of the Access Control Server

At the core of the new solution is the Access Control Server (ACS), which integrates biometric verification with AI-powered risk checks to authenticate transactions. This setup ensures that payments are verified securely while also enabling real-time fraud monitoring and risk management. By replacing OTP-based verification, the system aims to reduce transaction failures and streamline the payment experience for users.

Capacity and Efficiency

The ACS is designed to handle up to 10,000 transactions per second, supporting high-volume online payment traffic. Traditional OTP issues currently account for around 35% of transaction failures, highlighting the need for a more reliable authentication method. With biometric verification, these errors are expected to decline, allowing users to complete payments faster and with fewer interruptions.

Alignment with RBI Guidelines

The launch comes in line with RBI’s September 2025 guidelines, which call for stronger and smarter authentication methods to enhance security and reduce payment failures. Biometric verification meets these requirements by providing a secure, difficult-to-replicate method of confirming user identity. This approach strengthens digital payment security while reducing the chances of fraud, which led to losses exceeding ₹520 crore in FY25.

Benefits for Users and Merchants

For users, biometric authentication offers a smoother and faster payment experience by eliminating the need for repeated OTP entry. For merchants, it improves transaction success rates and reduces failed payments, which can lead to higher customer satisfaction and more efficient operations.

The integration of AI-powered risk checks adds another layer of protection. The system continuously analyses transactions for unusual patterns, helping prevent fraudulent activity before it impacts users.

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Conclusion

The partnership between Razorpay and YES BANK is aimed at strengthening the digital payments ecosystem in India. By combining biometric technology with AI, the solution provides a balance between security and user convenience. 

As online transactions continue to grow, innovations like biometric authentication are likely to play an important role in enhancing trust and reducing transaction errors across the digital payments landscape.

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