In the ever-evolving payments industry, advancements made in the name of added convenience and consumer preferences typically call for new and improved security measures. Unfortunately, the enhancements in cyber security and fraud prevention typically mean less convenience for consumers making payments and the businesses accepting them. Now, there’s an authentication technology that’s transforming the way payments are processed and improving security at the same time. Biometrics are changing the game.
What is biometric technology?
Biometric authentication allows consumers to use some aspect of their physical identity to authenticate their payment. So far, fintech professionals have developed equipment and software that would allow consumers to authenticate their payments with fingerprints, retina scans, or even a selfie!
How could it help?
Biometrics could add a very valuable layer of security to the payments we make every day. By using the completely unique identifiers of the human body, authentication is much harder to fake. Other great benefits of this technology include the elimination of need for pins and passwords that can be easily forgotten and a much faster authentication process. This new technology even eliminates the need for an actual card or to be present or physically used.
What is the outlook for biometrics?
A 2016 report listed biometrics as the most disruptive technology in digital commerce. Many companies are still working to develop more ways for consumers to validate their identity with the use of fingerprints, voices, irises, and faces. Because 62% of consumers have already stated that they would feel more secure using their fingerprint versus a password, the payments industry is wasting no time in finding the right way to make biometrics mainstream. According to “Acuity Market Intelligence, mobile biometrics is projected to secure 65% of all mobile commerce transactions by 2020, generating $34.6 billion in annual revenue.”
MasterCard has already rolled out their ‘selfie pay’ option in Europe, which enables their mobile app users to confirm their online payments by taking an image of their face on their smartphone. The app, that also supports fingerprint authentication, is offering ease for customers who would typically need to provide yet another password. While other companies like Apple, Android, and Discover are also allowing fingerprint authorization for transactions using their proprietary apps, few companies have been able to go to market with a biometrics option that can be used with broader payment systems.
What are the challenges to biometrics?
As with any new payment processing technology, there will undoubtedly be risks involved with implementing and using biometric options. As developers and engineers are creating these biometric devices and software, hackers are likely looking for ways to work around the new security measures. Fintech firms are being very careful in their testing and releases, as they want to be sure they have resolved as many issues as possible before going to market with biometric payment authentications. Biometrics are still very new to the industry and there will undoubtedly be bugs to work out as they become more mainstream.
There are also concerns about the protocol in case biometric data is stolen. When payment verification involves body parts, there’s no such thing as re-issuing authentication data. Many firms are apprehensive about the amount of risk that is associated with biometrics for this reason. Also, companies and consumers alike are questioning the legal implications of having biometric data submitted and stored in various places.
Biometric technology is not only concerning, but also cumbersome. Transactions involving biometric data call for new hardware, new software, new training, new procedures, etc. Bringing a new biometric authentication process to market, processors, merchants, and consumers will all have to adjust.
Processors, merchants, and consumers would all be wise to stay up-to-date on the latest developments in biometric enabled payments. This kind of technology has the power to completely change the way retail and ecommerce operate and the world views security. If you’re considering getting ahead of the curve in this revolutionary technology, be sure to evaluate and test thoroughly to ensure your merchants and their customers are not only pleased, but protected.