Visa, global card network provider, will be transforming digital checkouts by phasing out the two-factor authentication (2FA) process for routine transactions. Instead, they will put a scrutiny layer that will give a risk-based prompt. Regular transactions that are expected to be risky or unusual by banks are using verified through a One Time Password (OTP) check.
The intention behind this move would be to enhance customer experience and reduce any possible friction that they encounter in the process. Visa’s Asia-Pacific Risk-Head, Joe Cunningham told a national daily that the new system would encourage the adoption of digital payments and help the industry’s growth which is mostly powered by the e-commerce sector.
The company is planning to call in domestic regulators and its banking partners to discuss this move, how eventually 2FA norms could be eased and how they could get in line with best global practices.
The existing two-factor authentication process involves having the customer fill in card details (debit or credit) and then verify the transaction after receiving OTP on the registered mobile number. By removing OTPs from transactions, the financial services company will be vetting data with an EMV 3D secure to ascertain the risk and value. This method is already in place in Visa’s branches in Singapore and Australia.