Contactless cards have already taken the payments industry by storm. The rise of the online world has made payments faster and more convenient than ever. Now the industry is embracing the next wave in this revolution, which involves collecting biometrics data and storing it on a contactless payment card. As a result, consumers can pay using a fingerprint, handprint, iris identification, or voice recognition at the point-of-sale.
The use of biometrics for payments is growing at a rapid pace, with forecasts for the market to be worth more than $9 billion by 2022, up from $4 billion in 2015.
According to a report issued by Paymentsense, Britons increasingly see a world where biometrics are integrated into payments. Nearly one-third of 2,000 those polled believe fingerprints and biometrics represent the wave of the future for payments.
In fact, fingerprints/biometrics outperformed all other categories for consumer payments across iris scanning (11%), face ID (8%), microchip/wearable technology (8%), voice ID (6%), and augmented reality (3%). Business owners, however, mostly envision voice ID being integrated into payments systems in the future at 18% compared to fingerprints/biometrics in a close second with 17% of the vote.
U.K. Out Front for Biometric Payment Cards
The U.K. is embracing the next big technology for contactless payment cards—biometrics. NatWest and Royal Bank of Canada (RBC) are among the first movers, having rolled out a test program involving biometric fingerprint technology on contactless cards that reportedly bolsters security.
Some 200 customers are participating in the trial, which will support fingerprint for payment verification on transactions worth more than GBP 30 (USD $39.11). Biometric payment card technology was first tested in Cyprus and Italy and was introduced by Netherlands-based Gemalto.
It’s not just banks, either. Mobile device maker Samsung has introduced Samsung Pay for PFS payment cards. It gives customers the opportunity to “make contactless payments with a PFS Mastercard using NFC” with fingerprint authentication, PIN or iris biometrics.” First, users open the Samsung Pay app with a swipe from the bottom of their mobile device. Next, verify their identity, and then tap at the point-of-sale to complete the transaction.
The payment card is a contactless card only that includes fingerprint data and sensor technology. To use it, a customer must place their finger over the sensor while using the contactless card as usual at the point of sale.
Even without biometrics, contactless cards are popular. They are quick, as customers only need to tap their card on a device at the point-of-sale. But the cards don’t have the capacity to support payments over a certain amount, generally around $30. For bigger amounts, users must enter a PIN, which is another step that slows down the transaction time. This has stunted growth despite the fact that in 2018 contactless technology powered more than 6 billion payments, according to The Week Business.
Chief among the benefits of biometric fingerprint technology is security. While a PIN can be stolen and a signature can be forged, it’s much more difficult to copy “physical traits.” That explains why so much attention is being focused on this next wave of payment cards, as evidenced by hardware and software companies alike pouring resources into researching and developing methods such as fingerprinting and even voice recognition technology.
The greatest risk tied to biometric payment card is reliability. Questions surround the reliability of data that is collected for sensors, which could compromise the accuracy of the technology. Also, a user’s fingerprint, voice, and facial features could be altered as a result of an extreme event, such as a major accident, which could suggest that the data would need to be updated in the future.
Some concessions could be made to account for a person’s biometric changes over time. For instance, the system would still accept a transaction even if the person’s voice becomes slightly different. But if developers compromise too much, it could have the unintended consequence of influencing the security of the systems.
Biometric card payments are still developing, and market participants may need to remain nimble as technology evolves. Once consumers get a feel for these convenient transactions, however, there may be no going back.