Mastercard Passkeys: A Secure and Seamless Future for Payments

Online payments always change, but security is essential for customers and companies. Mastercard is at the forefront of this development with its innovative passkey technology, which embraces the future of safe authentication.

Mastercard has taken a big step forward with releasing its Mastercard Token Authentication Service (TAS). They are already a leader in safe payments. This new service lets users make passkeys that make the registration process easier when making online payments.

It's a great mix of ease of use and strong security. This blog post discusses Mastercard's new way of handling passkeys and how it might change the future of payment security. 

This blog explores Mastercard's innovative approach to passkeys and its implications for the future of payment security. We will also explore Authsignal's Multi-Factor Authentication (MFA) approach.

Why Passkeys are Revolutionizing Financial Services?

Integrating passkeys into the financial services sector represents a significant shift towards a more secure and user-friendly authentication landscape. This transformation is primarily driven by evolving consumer expectations. Mastercard has revealed that a staggering 70% of consumers feel overwhelmed by the number of passwords they need to manage.

Furthermore, over 80% of confirmed data breaches stem from compromised passwords. Recognizing the limitations of passwords and the growing threat from cybercriminals targeting shared secrets like OTPs, Mastercard advocates for a paradigm shift towards "person-based factors" for authentication. Passkeys, by leveraging biometrics and device-based authentication, effectively address this need.

Beyond enhanced security, passkeys eliminate traditional password-related pain points like phishing attacks. Passkeys provide a compelling solution for financial institutions seeking to elevate security while streamlining user interactions by replacing passwords with cryptographic keys that are both user-friendly and resistant to exploitation.

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Mastercard's Pioneering Role in Passkey Technology

Mastercard has been proactive in shaping the future of secure authentication. It is a founding member of the FIDO Alliance, a consortium dedicated to standardizing and promoting robust authentication solutions. The launch of the Mastercard Token Authentication Service (TAS) further solidifies this commitment to innovation.

TAS is a groundbreaking initiative that allows users to create passkeys specifically designed to streamline the authentication process during online payments. These passkeys adhere to FIDO standards, ensuring seamless interoperability across various devices and platforms. This commitment to open standards ensures widespread adoption and a future-proof authentication infrastructure.

Check out this video to learn more about Master Card Passkeys:

Understanding Mastercard Passkeys: An Overview

While passkeys can be created at various phases of the payment journey (for example, card insertion within an issuer app), let's look at a common checkout scenario to demonstrate the capability of TAS:

1. Checkout with Secure Authentication

When the user clicks the "Pay" button, they are transferred from the merchant's website to a secure Mastercard page for authentication. This redirection is consistent with EMV 3DS, a security technology intended to improve the security of online card transactions. The redirection ensures that the authentication process occurs within a trusted Mastercard environment.

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2. Optional Passkey Creation

After successfully authenticating using traditional methods (e.g., password, OTP), customers can create a passkey, particularly for Mastercard. This passkey is required for future seamless authentication across many websites that use Mastercard's TAS service.

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3. Passkey Login During Checkout

Assuming a pre-existing passkey, the user faces two possibilities when clicking "Pay" at a participating merchant:

• Standard Passkey Flow: The user is forwarded to the secure Mastercard page (e.g., verify.mastercard.com). Here, they can use their pre-created passkey for WebAuthn authentication. After authentication, the user is effortlessly sent to the merchant's website to finish the transaction. The user authenticates with Mastercard, making this a first-party payment context.
• SPC Passkey: This scenario keeps the customer on the merchant's website throughout checkout. A popup window would show payment data and allow passkey authentication. Due to constraints, this third-party payment environment is not extensively used. SPC passkeys' future depends on industry collaboration and development.

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MasterCard Token Authentication Service

TAS's launch represents a big step in accepting passkeys in the payment ecosystem. Mastercard was the first primary credit card provider to provide a dedicated passkey service, which allows customers to replace password-based authentication with a more secure and convenient biometric solution.

Once a user creates a passkey, it can be used for transactions across participating merchants, eliminating the need for a separate passkey for each website. This improves the customer experience and makes the checkout process more accessible for retailers.

Benefits and Use Cases for Merchants and Consumers

The implementation of Mastercard passkeys through TAS offers a multitude of benefits for both merchants and consumers:

Merchants

• Lower Checkout Friction: Passkeys make checkout easier by eliminating the need for password entry and time-consuming authentication processes. This can result in higher conversion rates and better client satisfaction.
• Enhanced Brand Image: Offering a secure and user-friendly payment experience can positively impact a merchant's brand image and foster customer trust.
• Decreased Chargeback and Fraud Risks: Authentication linked to the user's biometric data significantly lowers the likelihood of fraud and chargebacks. This secure method ensures that only the authorized user can complete transactions, providing additional protection for merchants.

Consumers

• Seamless Checkout Experiences: Passkeys allow a swift and effortless checkout process across various devices and participating merchants. No more struggling to remember complex passwords or encountering login roadblocks.
• Enhanced Security: Biometric authentication offers a significant layer of security compared to traditional passwords, protecting consumers from unauthorized access and phishing attacks. This peace of mind can significantly boost consumer confidence in online transactions.
• Improved Privacy: Passkeys do not store sensitive information like card details on the user's device or server. This minimizes the risk of data breaches and safeguards consumer privacy.

Future Impact: Adopting Instant, Secure Payments

The widespread adoption of Mastercard passkeys holds immense potential for the future of online payments. Here's a closer look at some critical implications for developers and merchants:

Industry Collaboration

The successful implementation of passkeys necessitates collaboration across various stakeholders. This includes collaboration between payment networks, device manufacturers, and browser developers. Working together to ensure seamless interoperability and broad device support is paramount for widespread adoption.

Consumer Education

Educating consumers about the advantages of passkeys, particularly in terms of security and convenience, will be crucial for driving user adoption. Merchants can play a vital role in this process by clearly communicating the benefits of passkey-based authentication to their customers.

Authsignal: Your Trusted Partner for Secure and Frictionless Authentication

Authsignal is a leading provider of Multi-Factor Authentication (MFA) solutions designed to empower businesses with a comprehensive approach to online security.

• Seamless Integration: Our platform seamlessly integrates with your identity stack, allowing businesses to leverage the combined power of passkeys and MFA for enhanced security.
• Flexible and Risk-Based Approach: We offer a customizable MFA solution that adapts to different risk levels. This ensures a balance between security and user experience.
• Frictionless Customer Journeys: Our no-code rules engine streamlines authentication, reducing friction for legitimate users and deterring fraudsters. This allows real-time adaptation to security threats, keeping product engineering teams productive while identity and fraud-ops teams ensure customer safety.
• Real-Time Fraud Detection: Authsignal's advanced analytics provide real-time insights into user behavior, enabling businesses to identify and prevent fraudulent activities.
• Comprehensive Authentication Solutions: Beyond passkeys, Authsignal offers many authentication options, including passwordless authentication, eKYC, and biometrics, allowing businesses to create a layered security strategy.

By partnering with Authsignal, businesses can leverage Mastercard passkeys while benefiting from our robust authentication platform, ultimately creating a secure and convenient online experience for their customers. Sign up for a free Authsignal account today and explore how we can help you seamlessly integrate Mastercard passkeys and create a secure and convenient payment experience for your customers.