diff --git a/power-pay-backend/src/main/java/com/adorsys/gis/powerpay/powerpaybackend/repository/UserRegistrationRepository.java b/power-pay-backend/src/main/java/com/adorsys/gis/powerpay/powerpaybackend/repository/UserRegistrationRepository.java
new file mode 100644
index 00000000..f57155ca
--- /dev/null
+++ b/power-pay-backend/src/main/java/com/adorsys/gis/powerpay/powerpaybackend/repository/UserRegistrationRepository.java
@@ -0,0 +1,8 @@
+package com.adorsys.gis.powerpay.powerpaybackend.repository;
+
+import org.springframework.data.jpa.repository.JpaRepository;
+import com.adorsys.gis.powerpay.powerpaybackend.domain.UserRegistration;
+
+public interface UserRegistrationRepository extends JpaRepository<UserRegistration, Integer> {
+    
+}
diff --git a/power-pay-backend/src/main/java/com/adorsys/gis/powerpay/powerpaybackend/services/UserRegistrationService.java b/power-pay-backend/src/main/java/com/adorsys/gis/powerpay/powerpaybackend/services/UserRegistrationService.java
new file mode 100644
index 00000000..9fce7dba
--- /dev/null
+++ b/power-pay-backend/src/main/java/com/adorsys/gis/powerpay/powerpaybackend/services/UserRegistrationService.java
@@ -0,0 +1,13 @@
+package com.adorsys.gis.powerpay.powerpaybackend.services;
+
+import com.adorsys.gis.powerpay.powerpaybackend.domain.User;
+import com.adorsys.gis.powerpay.powerpaybackend.domain.UserRegistration;
+import jakarta.validation.constraints.NotNull;
+
+public interface UserRegistrationService {
+
+    User registerUser(@NotNull Integer registrationId, String pin, String otp);
+
+    UserRegistration createProcedure(String phoneNumber, String userName);
+
+}
diff --git a/power-pay-backend/src/main/java/com/adorsys/gis/powerpay/powerpaybackend/services/UserRegistrationServiceImpl.java b/power-pay-backend/src/main/java/com/adorsys/gis/powerpay/powerpaybackend/services/UserRegistrationServiceImpl.java
new file mode 100644
index 00000000..d006d4af
--- /dev/null
+++ b/power-pay-backend/src/main/java/com/adorsys/gis/powerpay/powerpaybackend/services/UserRegistrationServiceImpl.java
@@ -0,0 +1,69 @@
+package com.adorsys.gis.powerpay.powerpaybackend.services;
+
+import java.security.SecureRandom;
+
+import org.springframework.stereotype.Service;
+
+import com.adorsys.gis.powerpay.powerpaybackend.domain.User;
+import com.adorsys.gis.powerpay.powerpaybackend.domain.UserRegistration;
+import com.adorsys.gis.powerpay.powerpaybackend.repository.UserRegistrationRepository;
+import com.adorsys.gis.powerpay.powerpaybackend.repository.UserRepository;
+import com.adorsys.gis.powerpay.powerpaybackend.utils.DataSecurityService;
+import com.adorsys.gis.powerpay.powerpaybackend.utils.UserRegistrationException;
+
+import jakarta.validation.constraints.NotNull;
+import lombok.AllArgsConstructor;
+
+@Service
+@AllArgsConstructor
+public class UserRegistrationServiceImpl implements UserRegistrationService {
+
+    private final UserRegistrationRepository userRegistrationRepository;
+    private final UserRepository userRepository;
+    private final DataSecurityService dataSecurityService;
+
+    private static final String CHARACTERS = "ABCDEFGHIJKLMNOPQRSTUVWXYZabcdefghijklmnopqrstuvwxyz0123456789";
+    private static final int OTP_LENGTH = 8;
+
+    @Override
+    public User registerUser(@NotNull Integer registrationId, String pin, String otp) {
+        UserRegistration userRegistration = userRegistrationRepository.findById(registrationId)
+                .orElseThrow(() -> new UserRegistrationException("User registration not found"));
+
+        User newUser = new User();
+        newUser.setUserName(userRegistration.getUserName());
+        newUser.setPin(dataSecurityService.hashData(pin));
+
+        try {
+            userRepository.save(newUser);
+        } catch (Exception e) {
+            throw new UserRegistrationException("User registration failed: " + e.getMessage());
+        }
+
+        return newUser;
+    }
+
+    @Override
+    public UserRegistration createProcedure(String phoneNumber, String userName) {
+        UserRegistration userRegistration = new UserRegistration();
+
+        // generating an otp
+        StringBuilder otp = new StringBuilder();
+        SecureRandom secureRandom = new SecureRandom();
+
+        for (int i = 0; i < OTP_LENGTH; i++) {
+            int index = secureRandom.nextInt(CHARACTERS.length());
+            char character = CHARACTERS.charAt(index);
+            otp.append(character);
+        }
+
+        var otpValue = otp.toString();
+
+        userRegistration.setPhoneNumber(phoneNumber);
+        userRegistration.setUserName(userName);
+        userRegistration.setOpt(dataSecurityService.hashData(otpValue));
+        userRegistrationRepository.save(userRegistration);
+
+        return userRegistration;
+    }
+}
diff --git a/power-pay-backend/src/main/java/com/adorsys/gis/powerpay/powerpaybackend/utils/DataSecurityService.java b/power-pay-backend/src/main/java/com/adorsys/gis/powerpay/powerpaybackend/utils/DataSecurityService.java
index 0aef2fdb..0e7e5e8a 100644
--- a/power-pay-backend/src/main/java/com/adorsys/gis/powerpay/powerpaybackend/utils/DataSecurityService.java
+++ b/power-pay-backend/src/main/java/com/adorsys/gis/powerpay/powerpaybackend/utils/DataSecurityService.java
@@ -15,6 +15,7 @@ public String hashData(String data) {
 
     //Method to compare a given String with hashed value
     public boolean compareHashedData(String data, String hashedData) {
+
         return passwordEncoder.matches(data, hashedData);  
     }
 }
diff --git a/power-pay-backend/src/main/java/com/adorsys/gis/powerpay/powerpaybackend/utils/UserRegistrationException.java b/power-pay-backend/src/main/java/com/adorsys/gis/powerpay/powerpaybackend/utils/UserRegistrationException.java
new file mode 100644
index 00000000..8d51b552
--- /dev/null
+++ b/power-pay-backend/src/main/java/com/adorsys/gis/powerpay/powerpaybackend/utils/UserRegistrationException.java
@@ -0,0 +1,11 @@
+package com.adorsys.gis.powerpay.powerpaybackend.utils;
+
+public class UserRegistrationException extends RuntimeException {
+    public UserRegistrationException(String message, Exception exception) {
+        super(message, exception);
+    }
+
+    public UserRegistrationException(String userRegistrationNotFound) {
+        super(userRegistrationNotFound);
+    }
+}
diff --git a/power-pay-backend/src/test/java/com/adorsys/gis/powerpay/powerpaybackend/utils_test/CompareHashPasswordTest.java b/power-pay-backend/src/test/java/com/adorsys/gis/powerpay/powerpaybackend/utils_test/CompareHashPasswordTest.java
index a6e70cfe..d0c66e0c 100644
--- a/power-pay-backend/src/test/java/com/adorsys/gis/powerpay/powerpaybackend/utils_test/CompareHashPasswordTest.java
+++ b/power-pay-backend/src/test/java/com/adorsys/gis/powerpay/powerpaybackend/utils_test/CompareHashPasswordTest.java
@@ -20,6 +20,7 @@ public class CompareHashPasswordTest {
 
     @Test
     void compareHashPassword(){
+
         String rawData = "mypin";
         String hashedData = dataSecurityService.hashData(rawData);
         assertTrue(dataSecurityService.compareHashedData(rawData, hashedData));