Mastercard recently announced the latest enhancement to its new Mastercard Payment Passkey Service at its launch at the Singapore FinTech Festival which enables secure, on-device biometric authentication through facial scans or fingerprints, the same way consumers unlock their phones every day. With these combinations of the fraud-busting powers of tokenisation, the convenience of payment passkeys, and the addition of streamlined guest checkout capability courtesy of Click to Pay, consumers can now enjoy seamless, one-click checkout across devices, browsers, and operating systems, eliminating the need for static or one-time passwords (OTPs).

What’s Changing?

Traditionally, Mastercard transactions in APAC relied on OTPs sent via SMS or email as an additional security layer. 80% of confirmed data breaches globally are related to weak or stolen passwords, so it’s no surprise that the majority of consumers (91%) in Asia Pacific worry about cyber threats. Crucially, by using Mastercard Click to Pay, online shoppers no longer need to have an account or a saved card-on-file with a merchant to use biometric authentication with payment passkeys, making quick, easy, secure guest checkout a reality. At the same time, merchants will see fewer abandoned carts, increased sales, and fraud protection, while issuers will gain top-of-wallet status and customer security, demonstrating the far-reaching benefits for the entire ecosystem.

The Technology Behind the Shift

The OTP-free model is underpinned by tokenisation, biometric authentication, and AI-driven fraud detection. Tokenisation replaces sensitive card data with unique tokens, ensuring that actual card information is never exposed during a transaction. Biometric verification, such as fingerprint or facial recognition, enhances user security and convenience. AI technologies further analyse transaction patterns in real-time, detecting potential fraud without interrupting legitimate transactions.

How it works

Consumers only need to enrol their Mastercard card once to use payment passkeys for online payments.

1. When checking out, shoppers select their Mastercard card, either as a guest or from a securely stored card on file with the merchant.   
2. They then confirm the payment using biometric authentication on their device, such as a fingerprint or face scan.
3. Once authenticated, the payment is instantly completed.

Why APAC?

APAC stands for Asia-Pacific, a region that encompasses countries in East Asia, Southeast Asia, South Asia, and Oceania. It is a diverse and expansive area that includes major economies such as China, Japan, India, Australia, South Korea, and Singapore, as well as developing markets in regions like Southeast Asia. The APAC region is known for its dynamic digital transformation, rapid technological advancements, and growing adoption of innovative payment solutions, making it a focal point for companies like Mastercard to launch new payment initiatives. In the context of Mastercard’s OTP-free initiative, APAC is a key market due to its strong e-commerce presence and tech-savvy consumers.

Potential Challenges

While OTP-free transactions offer numerous advantages, adoption may face challenges such as:

• Consumer Education: Ensuring users understand and trust the new security features is critical.
• Merchant Readiness: Businesses must upgrade their payment systems to integrate these advanced technologies.
• Regulatory Compliance: Mastercard must work with regional regulators to ensure adherence to local laws governing digital payments and data security.

By tokenising both payment credentials and biometric authentication, the Mastercard Payment Passkey Service ensures that neither the consumer’s payment credentials nor biometric data are ever shared with third parties, rendering the data useless to fraudsters and scammers.