From wearable technology to smart phones, biometrics seemed to dominate at CES this year.
Biometrics are unique human identifiers, such as fingerprints or retina scans, used as
forms of authentication. This technology, popularly used in wearable fitness trackers, has experienced a surge in the payment industry within the last year – writes Nish Modi is the SVP of Product and Innovation at SecureNet..
Consumers were first introduced to biometric payment technology (on a mass scale) with the launch of Apple Pay’s fingerprint ID in October. Interest has continued to grow after exhibitors at CES proposed new biometric models that could accelerate the trend into the mainstream. With the technology available and the demand present, this milestone just might signify 2015 as the year that consumers have the option to pay via biometric technology at checkout.
The role of biometrics in payments
As biometric technology advances, there is potential for it to become rapidly incorporated into the payment industry. Mobile banking applications have the ability to replace wallets with smartphones and biometric sensors could make passwords and PINs a thing of the past.
ATMS are expected to adopt biometrics authentication and Visa and MasterCard plan to replace their online password systems with biometric technology this year. These evolving trends are quickly propelling the millennial generation into a contactless payment era, and they’re excited about it.
A survey released by Visa Europe found that 69% of Europeans aged 16-24 think their lives will be “faster and easier” without passwords. The speed and convenience of contactless payment brings instant appeal to consumers and merchants alike. Without the physical exchange of a plastic card, transactions could potentially process faster – busting lines at check-out; enabling merchants to offer a very unique consumer experience. Biometrics can enhance customer service outside of just payments.
For example, merchants will soon have access to new retail technology from NEC Enterprise Biometrics that uses facial recognition to identify valued customers, as well as former shoplifters, when they enter the store. Similar technology from FaceFirst can alert merchants or law enforcement when customers enter prohibited areas of the store when shoplifting situations occur. This technology allows merchants to provide the best service and protection to customers.
What biometrics mean for security
The heightened security benefits of biometric payment technology are certainly the driving forces behind the growing trend. Highly publicized data breaches and stolen passwords have raised serious concerns for the payment industry and have increased the need for new security methods.
Using unique features that cannot be lost, forgotten or changed would ensure more seamless security and accurate storage of personal data. For even higher security, developers are considering using combinations of biometric points to identify users, such as a fingerprint, iris/retina and palm scanning.
Swedish startup Quixter uses an infrared light to scan the veins inside the user’s palm. From a security standpoint, they say it is much better technology than even a fingerprint scanner, as it does not leave traces behind. These high security systems also offer a strong audit trail and prevention from fraud and identity theft. As biometric security options reach new levels of sophistication, they have the potential to be utilized in more settings than just personal financial data.
Biometric technology is already being tested for widespread use in hospitals, airports and the military. Already in 2015, Air Canada started requiring employees to clock in and out using fingerprint scanning. And hospitals in New York, Ohio, Kentucky and California purchases biometric technology for security and compliance purposes. West Point will try to take it a step further this year by developing technology that uses biometric behaviour such as writing or typing rhythm as security identifiers.
Challenges for software developers
While this new technology poses impressive advancements in the speed and security of payments, it is still in a vulnerable stage of development. Hackers have recently succeeded in lifting fingerprints, the most popular biometric used in emerging devices and applications, by using photographs to access personal accounts.
Well-known hacking group the Chaos Computer Club was even successful in replicating the German defence minister’s fingerprint. Instances like this challenge software developers to quickly find the most accurate solutions that meet the high demand from consumers.
Developers continue to search for the key arrangement of biometric and tokenization layers that offers the highest security, while delivering the best user experience. These layers could involve using newer forms of biometric authentication, such as skin temperature, palm veins, and voice recognition.
While biometrics could eventually eliminate the need to carry a wallet, the biggest hurdle is still widespread adoption. As with many new experiments in payments, retailers and consumers will both need to be in agreement on the best form of biometric payments before we can officially leave our credit cards at home. But for now, biometrics is definitely the trend to watch.