Advances in biometric payment technology could soon mean the end of physical credit cards. Pressure from both payment providers and consumers for quicker, more convenient, more secure means to make financial payments has boosted research into biometric technology – using elements of people’s physical make-up to authenticate payments.
While some kinds of biometric verification (such as fingerprint recognition on smartphones) are now widespread, banks and payment providers are also looking into other options. At their heart, they all aim to simplify and speed up payments – writes Sascha Breite, Head of Future Payments at SIX Payment Services.
Recent examples include:
- Inserts into shoes that can identify someone from the way that they walk, detecting the pressure of their gait
- Technology that can recognise an individual’s heartbeat
- An application that recognises ear and cheek patterns when a mobile device is held against the head – as ears are as individually unique as fingerprints
- Four-finger authentication, using finger patterns in addition to fingerprints
- General motion sensors which authenticate a user from the way they move
Many large financial services companies, including Visa and Mastercard, have launched research projects, investing resources in laboratory experiments to determine which technologies are most secure, and could be accepted by consumers.
In the summer of 2016, Visa released the results of a survey showing that almost three-quarters (73%) of European consumers are interested in using biometric payment authentication in conjunction with other security measures.
More than half of the survey’s respondents thought that biometric payment identification could mean a faster and easier payment experience. More than 80% of those questioned believe fingerprint recognition is the most secure biometric technology, with 73% as ‘comfortable’ with it as with using a PIN. Two thirds of respondents actively want to use biometrics as a means of payment authentication, according to Visa’s survey.
There are already examples of advanced technology being deployed in retail stores to improve speed and convenience.
Amazon Go has opened a supermarket in the United States where consumers use their mobile devices to check in, then place goods into their bags and leave the store without going through any physical checkout process.
Technology recognises what they have placed in their bags and the payment takes place in the background, removing the traditional need to queue, remove goods from a basket and make a payment at the checkout.
This system may become more popular in future, as – in addition to the convenience and speed for the consumer – it reduces the number of retail employees and the physical space needed for checkout facilities.
At the other end of the transaction chain, looking at those receiving biometric payment, there are developments in European regulations which now enable third parties to initiate such payments (Payment Service Directive/PSD2).
As a result, these changes are obliging the established banks to open up their systems to new entrants. Although we are in the early stages of this development, biometric payment authentication could help this develop and allow more instant payments to be made securely from consumer to merchant accounts.
Biometric advances will also disrupt existing point of sale infrastructure. This won’t take place all at once, but as new technologies emerge and are proved reliable and popular, they will provide an increasingly frictionless shopping experience.
Alongside these innovations, and the advantages of speed and convenience, everyone in the sector is still focussed on data protection, privacy and security. Biometric data could overlap with data from health applications, which is (and should be) protected. We expect to see more regulations in future setting out how biometric data can be used, stored and shared.
There also has to be a high degree of trust in any system using biometric data. Some security experts warn that, although biometric data is harder to steal than conventional data, if someone does succeed in accessing it, the consequent problems could be significant, since biometric data cannot be changed or replaced.
Banks and other financial service companies have a large and growing range of such information but there is still a need for trustworthy service providers. We may see the emergence of a centralised, trustworthy framework for biometric authentication data, which all parties can agree upon. For the moment however, banks are generally unconvinced of the full benefits of biometric technology and have been reluctant to embrace it.
Once an authentication standard can be agreed, it will leave room in the market for more personal identification. There may be no need for a physical credit or debit card, just an account number and a representation of a physical action, or biometric detail. The future of complete biometric payments hasn’t arrived yet, but it seems to be very close by.
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