PhonePe, the primarily UPI-powered digital payments services owned by Flipkart (which is in turn owned by Walmart) has today announced the launch of a new ‘one click payment’ option in partnership with Visa. PhonePe claims that it is the first digital payments provider in the country to have launched this service.
The feature and regulations around it are pretty similar to the on-tap wireless payment feature that is currently available on VISA debit/credit cards. Similar to that, users with Visa cards will have the option on the PhonePe app to activate the new payment feature through a one-time validation process to register their card. Users can then carry out transactions on recharges, bill payments, switch platform and many more use cases on the PhonePe app without having to enter an OTP or CVV for every subsequent transaction.
The transaction limit, as per RBI guidelines for such transactions, has been set to INR 2000 per transaction. PhonePe’s one-click feature is primarily based on Visa’s own safeclick tech, that allows consumers to pay directly without any two factor authentication upto a certain amount.
Hemant Gala, PhonePe’s VP for financial services said, “With millions of Visa cards saved on the PhonePe platform, the launch of ‘Visa Safe Click’ will help our customers experience single click seamless payments on the PhonePe app and at our merchant partners.”
One Click payments, despite some obvious security loopholes, have been gaining significant traction ever since launch. India is among the very few countries globally, to have mandated two factor authentication for all card-based transactions. The second authentication can either be a PIN or a real-time OTP generated by the payments company.
PhonePe’s one click payment bypasses that second authentication once a consumer provides requisite permissions. And even though Reserve Bank of India has laid out guidelines for such payments, concerns around security still remain. Fraudulent banking transactions have caused Indians to loose over INR 220 crores in 2019 according to Government data released on Wednesday. This is a 60% jump in money lost compared to the previous 12 months. Experts have argued that such non-verified transactions via on-tap/one-click options form a sizeable portion of this amount.