FreeCharge’s alternative to OTP a wake up call for other companies
In what is perhaps the first sign of new age Indian companies waking up to the potential of patents, Snapdeal-owned digital payments firm FreeCharge has indigenously developed an alternative to the SMS based one-time-password and has already filed a patent for the technology.
The authentication solution termed as ‘On The Go Pin’ is aimed at making both online as well as offline transactions faster by cutting the delay caused in receiving the OTP through text message.
This could become a trendsetter of sorts in the industry — dominated by the likes of Flipkart, Snapdeal and Paytm — which are heavily investing in R&D to develop various breakthrough technologies in the online space. However, filing of patents is still rare.
The technology developed by FreeCharge replaces the OTP received through the mobile airways with a pin that resides within the phone and keeps changing every few seconds.
In the backend, the servers of the bank and the merchants verify the pin in order to process the transaction. Govind Rajan, the chief operating officer of FreeCharge, said it eliminates wait time for both the retailers as well as customers since often there is a considerable delay in receiving OTP due to network connectivity issues.
This system fulfils the Reserve Bank of India’s (RBI) mandate for two factor authentication and does not require even a single paisa of additional investment by retailers or customers," said Rajan, who is also the chief strategy office of Snapdeal.
FreeCharge has already stuck a deal with Shopper’s Stop which will start transactions using the new technology.