A shopper taps “Pay” with a card they’ve already saved. The retailer has the card details, but the purchase may still require the shopper to confirm it’s really them. The requirement might typically demand a series of steps, such as entering a code sent by text, opening a banking app or, on an eligible purchase, confirming with the fingerprint, face scan or PIN they use to unlock their device.
Payment processors are adding that last option, the passkey, to the software that handles verification before the payment goes to the card issuer for approval.
In terms of the mechanics, the processor’s authentication software supports passkeys. The retailer sends the processor a payment request when the shopper taps a card. The processor checks which verification methods are available for that transaction. If it selects a passkey, the shopper’s device asks for a fingerprint, face scan or PIN and uses a cryptographic key to prove the shopper has access to the registered device. The private key stays on the device. Once verification is complete, the processor continues with the payment request, and the issuer decides whether to approve the charge.
That’s where two recently announced rollouts fit. Adyen is introducing Visa Payment Passkey through Authenticate, starting in the U.K. Checkout.com is offering it through its existing authentication integration, initially to selected merchants in the U.K. and Europe. Checkout.com said eligible merchants can add it without building a separate checkout flow and that existing verification methods remain available when a passkey cannot be used.
Where Processors Compete
The opportunity is clearest on repeat purchases. The PYMNTS Intelligence “Checkout Paradox Tracker” with PayPal reported that 80% of shoppers use stored payment credentials. In separate PYMNTS Intelligence research with Worldpay, 84% of shoppers considered one-click checkout important when deciding where to shop, and 18% chose their preferred shopping channel solely on whether it was available. Saving the card removes the need to type it in. The passkey addresses the next interruption, when the shopper is asked to verify the purchase.
In Adyen’s documented pilot, the shopper first completes a standard issuer challenge and then gets the option to create a passkey. When the shopper returns with the same card and device, Adyen’s Authentication Engine determines whether the purchase requires a challenge and which method to use. It considers factors including the browser and payment method. If it selects the passkey, the device prompt takes the place of another issuer challenge. If the passkey is ineligible or the engine selects another method, the shopper may still see a bank prompt. The documented flow also distinguishes a shopper placing a repeat order from a merchant charging a subscription automatically. The latter is outside the scope of the passkey flow.
For a retailer comparing processors, three numbers would show how much difference the feature makes. The first is how often shoppers have to respond to a verification prompt at all. The second is how often those shoppers are offered a passkey. The third is how often they complete the purchase after seeing it, compared with shoppers who get the bank’s usual prompt. A passkey can simplify a purchase that would otherwise require a bank challenge.
PYMNTS Intelligence and Worldpay found that 55% of firms with a strong cross-border focus use automatic payment retries. For merchants that route payments through multiple providers, that makes the connection between verification and authorization critical.
The handoff affects what the shopper experiences during an outage. If the backup route can carry the verification result, the shopper can proceed to authorization on that route. If the backup route requires fresh verification, the shopper may face another prompt. For a retailer comparing processors, that puts the checkout experience on the backup route alongside the experience on the primary one.
