Visa has temporarily halted its single-click checkout service for online transactions in India due to the Reserve Bank of India’s (RBI) push to tighten security standards for digital payments. The service was launched in 2019 to offer a smooth checkout process for consumers buying goods online for up to Rs 2,000 without requiring card verification value (CVV) or one-time passwords (OTP) to be entered during transactions.
Payment aggregators like Razorpay and Paytm had integrated this service for select Visa cardholders and several large e-commerce platforms had gone live with it. However, the service has been paused since 18 March.
Visa said it voluntarily paused the service in India and is working on an evolved form of network authentication product that complies with RBI guidelines. The company reassured its cardholders that they can continue to use their cards with additional factor authentication for e-commerce transactions to ensure a secure payment experience.
SBI Card, Axis Bank, Kotak Mahindra Bank and ICICI Bank were among the banks that had started supporting these transactions. Still, many of them informed their customers of the service’s suspension.
The RBI allowed card payment companies to offer the single-click checkout feature in 2015 after relaxing the additional factors of authentication required for digital payments. The limit for contactless payments through the tap-and-pay method was extended to Rs 5,000 in 2020. However, the RBI wants OTP to be mandatory for “card not present” transactions made in e-commerce purchases, in which the card is not physically present at the point of sale.
The single-click checkout feature gained popularity within a short period, with Paytm reporting 250,000 enrolments within 45 days of launching the service in February 2021.
Nonetheless, Visa’s decision to pause the service underscores the importance of complying with the RBI’s security standards for digital payments in India. As a result, consumers may need to enter additional authentication factors during online transactions for the time being. Visa assures its customers that it prioritizes providing safe, secure, and compliant payment solutions in India and globally.