Digital wallets and account-to-account payments are growing fast – but contactless cards are currently Europe’s most popular way to pay, and will remain central to the payments mix.
With fraud shooting up during COVID-19 and consumer concerns about hygiene and theft on the rise, biometric payment cards are the best way to secure the contactless transactions now used for over 80% of face-to-face payments.
To answer some common questions on biometric cards Payments Cards & Mobile interviewed Michel Roig, President of Payments and Access at Fingerprints, to answer questions regarding biometric payment cards – their benefits, current market status, and future adoption.
What value does biometrics bring to banks and consumers?
There are several benefits inspiring the adoption of our technology, starting with regulatory compliance and enhanced security.
The recently imposed Strong Customer Authentication (SCA) under the Second Payment Services Directive (PSD2) requires banks to perform more checks to confirm the identity of a consumer at the checkout.
Consumers must now take additional steps to authenticate themselves for certain transactions, such as those of a specific value or after every five transactions, to limit potential fraud use.
Consumers can authenticate themselves by using their PIN, however, biometrics can streamline this process.
Using their unique physical characteristics to pay essentially guarantees a consumer’s identity, so they can make SCA-compliant payments of any value that effectively reset the transaction counter every time they pay.
This kind of strong authentication has the potential to drastically reduce various types of fraud (and all associated costs), and it provides added convenience for consumers since they may never have to use their PIN again.
Adding biometrics to payment cards also helps issuing banks to bring some needed energy to their cards, helping them promote their brand and build consumer loyalty whenever it’s taken out to pay.
This brand exposure is not as strong with other payment methods, such as mobile payments where the card is hidden inside the phone. Given the innovative nature of biometric payment cards right now, it also shows that the bank is leading the curve – not falling behind it.
Finally, thanks to smartphones, consumers are now used to authenticating with a ‘touch’ and actively want to use biometrics in their everyday lives.
By capitalising on this trend for physical cards, banks have a timely customer acquisition and retention tool.
A study we recently ran found that 62% of consumers would switch banks to obtain a biometric payment card, indicating a high consumer demand for the security and convenience these cards provide.
What is your best advice to banks which may be considering launching a biometric payment card?
This might not be surprising… but my advice would be not to wait. We’ve conducted 24 pilot tests and eight commercial launches. We’re now in the second generation of cards, and we’ve repeatedly met the increasingly stringent certification requirements from the card schemes.
Essentially, the technology is out there and starting to add value for your competitors. Don’t wait until your cardholders begin to turn elsewhere.
Since we also found that 43% of consumers are willing to pay to get hold of a biometric payment card, banks can use them as a new revenue stream and expect a return on investment when offered as a value-add or premium service to cardholders.
What are the lingering concerns or misconceptions from issuing banks?
As with all new technology, there are apprehensions with being an early adopter.
One question that banks often ask is: “Where is a consumer’s biometric data is stored?” Are images of fingerprints stored in the cloud or on-prem by the issuer, creating a privacy and compliance nightmare?
The answer is no! The card doesn’t store an image of your finger. When you enrol, a template is saved and stored securely as encrypted data on the card and never leaves it.
I was also recently in the Middle East and someone asked me whether the card would break if it was kept in their back pocket as they sat down for a coffee.
Rigorous testing ensures the card’s biometric sensor can endure the same wear and tear as a normal card. This is an industry requirement, in fact.
Our sensors have also achieved Mastercard and Visa certification – a process that ensures the sensor is robust, scratchproof, and doesn’t dislodge during the life of the card.
Card scheme certification also requires strict anti-spoof measures. These make the attack vector so small that the effort and cost required to hack one card is pointless for fraudsters.
All of this comes together to make the biometric payment card much more secure than a card which only has a PIN for security.
Another common apprehension surrounds the cost of the technology. Cost of sensors has come down dramatically in the last few years, and this cost will reduce further as deployment volumes increase over time.
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