By 2023, the global biometrics market is predicted to grow by more than 15%, to over $24 billion. Yet, despite many of today’s most commonly-adopted biometric technologies stemming from the US, only 30% of that growth market will come from North America.
Emerging markets driving biometric authorised payments
So, if it is no longer just the US where consumers are rapidly embracing the security of biometrics and biometric authorised payments, where else in the world is the growth of the sector coming from? Surprisingly, much of this progress is taking place in emerging markets such as Latin America, Africa and Asia. Recent developments in these regions have shown they can rapidly incorporate biometric technology into country-wide banking, government IDs and retail programmes, without being held back by legacy technology and systems which have delayed wider biometric adoption across Europe and North America – according to Stan Swearingen, CEO of IDEX Biometrics ASA.
Disrupting the Asian retail market with a smile
According to a Technavio report, 36% of the global biometrics market growth will come from the Asia Pacific region. In this region, China is already ahead of the rest of the world when it comes to biometric authorised payments. In fact, it’s being adopted so quickly that cash is fast becoming obsolete in urban China, where the mobile payments market is worth around $12.8 trillion, led by fingerprint-to-pay apps, roughly 50 times the value of the mobile payment market in the US.
AliPay, China’s biggest payment app, from Alibaba, has 870 million registered users on its fingerprint-to-pay service. The brand even recently launched a trial ‘smile-to-pay’ feature at a branch of KFC in Southern China, which uses facial recognition to identify the customer at a self-order terminal and automatically charges them via the payment app – meaning the store has no cashiers, no tills and near-instant order collection.
Futuristic biometric authorised payments methods like this are increasingly disrupting the retail industry across Asia. Korea too is using biometric authorisation to make the shopping experience faster and more convenient. Recently, a Seoul convenience store became the first in the world to have customers pay with a hand scan. This palm vein authentication self-checkout facility features an emerging biometric authorised payments technology which scans the veins of a user’s hand to identify registered shoppers and requests payment from their account. Thailand is also incorporating biometrics into the shopping experience, with facial recognition at 7-Eleven stores identifying loyalty members, analysing in-store traffic and suggesting new products to customers.
It’s not just in retail where Asia is proving to be a leader of biometric adoption. India has launched the Aadhaar programme, the largest biometric-backed national identity scheme in the world. With this scheme, over a billion citizens will receive a unique 12-digit ID number, supported by fingerprint and iris data, which gives them secure access to welfare schemes and government services.
Developing government IDs in developing markets
However, while Asia may be leading the charge in biometric growth, it’s far from the only region where these technologies are transforming day-to-day activities. Across Africa, the national ID market is also maturing rapidly thanks to biometric data. Fingerprint and iris authentication methods are helping to synchronise the data from expansive populations while providing easier access to public services.
In Kenya, fingerprint authorisation has sped up the largest population registration programme in Africa. Its national ID project, Huduma Namba, has provided the government with a comprehensive central population database, leading to it being called “the single source of truth on a person’s identity”. Kenyans will be provided with a single fingerprint-backed ID card, for access to healthcare, to get a driving license, pay taxes, enrol in a public school, or even request access to the electricity grid.
Fingerprint scanning technology is also being used to empower farmers in Nigeria, where the ‘Anchor Borrowers Programme’, an agricultural subsidy, is now distributed via biometric ID cards. The digitisation of the scheme has seen all farmlands mapped to their owner’s biometric information. This has increased the efficiency of fund distribution while eliminating so-called ‘ghost-farmers’ from the database.
Latin America also sees the value in national biometric databases. Brazil’s electoral commission intends to register over 140 million Brazilians by the 2020 rollout of its biometric ID smartphone app, which it anticipates will reduce the risk of voter and benefit fraud. Residents, meanwhile, will be able to use the app to claim social security, and eventually integrate all ID documents into one app. Similar schemes are also underway in nearby Mexico, where the Sonora State Government recently adopted fingerprint authorised pre-payment cards to deliver benefit services.
The race for global adoption
Despite this growth in emerging markets, Europe and North America aren’t lagging behind in the race for global biometric adoption. In Europe, fingerprint recognition remains the dominant biometric growth sector and is expected to be worth $11.5 billion by 2023.
This growth is largely due to advances in security driving the demand for identification and payment methods secured by biometrics. Progress is fast emerging in the physical payment sector and, according to ABI Research, the biometric payment cards market is expected to see significant growth in Europe by 2021.
This year, credit card companies and banks across Europe – including Royal Bank of Scotland and Société Générale – have already embraced the opportunity to trial fingerprint-embedded payment cards to provide their customers with greater payment security. Fingerprint authentication technology will reduce the risk of card fraud as the owner must scan their thumb or finger in order to authorise transactions. Banking with your fingerprint is on the rise in the Middle East too, where Emirates NBD bank has launched an automated banking terminal to open new accounts authorised by biometric signatures.
Over in the USA, they are already developing the next wave of ground-breaking biometric technology. The ‘behaviometrics’ market, which includes methods such as keystroke and gait analysis, is expected to contribute to more than one-third of the total American biometrics market and dominate industry growth until at least 2025. This emerging technology, which can monitor unconscious movements and gestures, is seen as a promising, unobtrusive method of multi-factor authentication, when paired with more traditional and secure methods, such as fingerprint recognition.
As more markets across the world move to a password and PIN-free future, supported by biometric technology, continued awareness of security measures is vital. Recent research from the European Payments Council shows fingerprint scanning still has the greatest customer adoption potential for biometric authentication. But alongside this positive attitude towards fingerprint authentication, for biometric programmes to continue to global expansion, consumers must be assured that their data is secure.
Fingerprint authentication increases this sense of security among consumers. With fingerprints, only certain data points, not the full fingerprint image, are stored on the payment or ID card itself, meaning biometric data doesn’t leave the card. This will inspire trust in new consumers from emerging markets so that biometrics can continue to enhance security and make lives easier in all regions, risk-free. Biometric tech providers must educate manufacturers and consumers on these security issues in order to drive adoption beyond North America and across the globe.
The post Emerging markets driving biometric authorised payments appeared first on Payments Cards & Mobile.
