Steve Cook gives some examples of biometrics being used to make payments easier, talking about mobile payments, mobile POS, IoT payment, in-app messenger payments, and identity proofing for new accounts
In 2019, losses from card fraud topped a staggering USD 28 billion worldwide. The need for tighter security combined with falling production costs and rising consumer demand for contactless options have put biometric payment cards in the spotlight. ABI Research fore casts that up to 2.5 million biometric payment cards will be issued in 2021.
However, cards aren’t the only use case for biometrics in payments, so here are five additional ways biometrics are being used to make payments easier, faster, and more secure.
1. Secure digital wallets and mobile payments
Digital wallets, sometimes referred to as mobile wallets, have been around for a while but are only now gaining real traction. These virtual wallets allow users to store credit card or banking information so that they don’t have to carry physical cards with them and can make contactless payments in-person or online. Digital wallets also enable users to store digital versions of other items such as tickets, public transportation cards, or boarding passes. More recently, we’ve seen a rise in the adoption of digital wallets for securely storing, using, and exchanging cryptocurrency.
Likewise, mobile payment apps such as Paypal, Venmo, and Zelle, also enable payments online and in stores (usually with a QR code), as well as peer-to-peer payments. According to Appventurez, mobile wallet transaction volume will grow to USD 274.4 billion in 2021.
Today many digital wallets are protected by a PIN code – sometimes the same one used to unlock the mobile device. In other cases, they may be protected by passwords or private keys, which are easily forgotten. Such was the case for one unfortunate man who locked himself out of a wallet containing more than 7000 Bitcoins. Adding biometrics to mobile payments significantly enhances security without adding any friction to the process. For example, facial recognition combined with liveness detection to prevent spoofing attacks is a secure and convenient way for users to authenticate. Adding an independent, app-based biometric (vs the same biometric used to unlock the device) enables easy two-factor authentication; it also ensures users maintain access even if they lose or switch their device.
2. Contactless kiosk and mobile POS payments
Another use case for biometrics in payments is kiosk and mobile POS systems. One example is Payface, a company that uses face biometrics and liveness detection to enable customers to ‘pay by face’, eliminating the need for cash, cards, and even phones.
Other retail systems incorporating biometric payment technology include vending machines and other self-service kiosks such as those found at restaurants, airports, and sporting events. These systems can use a range of biometric modalities, including face, voice, and fingerprint. Benefits include reduced contact for staff and customers, increased profitability, and shorter checkout lines to improve the guest experience.
3. Smart device and IoT payments
With an explosion of voice-enabled smart home and other IoT devices comes the huge opportunity to take advantage of voice biometrics to quickly personalise interactions and authenticate users for secure access and payment transactions.
For example, anyone who has had to enter their email and password with a television remote understands the potential of using voice to control our televisions. Even if we remember our passwords and PINs, we’ve got to accurately type them!
More set-top boxes now support Alexa-like voice interactions. By adding voice biometrics, customers can easily and securely buy movies subscribe to sporting events. They can even make purchases while watching shopping channels or commercials – all right from the television.
4. In-app messenger payments
Messenger platforms like WhatsApp for Business offer a useful channel for B2C interaction. They are secure, convenient, and widely used by consumers. However, they lack the level of security required to take interactions to the next level: payment authorisations. With voice biometric payments in messenger channels, there is no need to force users to switch channels or place spending limits on transactions due to security concerns.
Combined with the user’s device as a factor (something they have), voice biometrics enables low-friction two-factor authentication. There is no need for passwords, PINs, or knowledge-based authentication – all of which are vulnerable to hacking and social engineering, not to mention frustrating for customers.
5. Identity proofing for new accounts
All of the above use cases focus on biometric authentication in payments. Equally important is the need for security and fraud prevention when opening new customer accounts online. Identity proofing to ensure a user is who they claim to be is an important – often regulated – step in the remote onboarding process. Fraudulent accounts can be used to steal real identities, create synthetic identities, and commit crimes like money laundering.
When using biometrics to open a new payment account, users takea selfie and face biometrics ensures that they are a match with their government-issued ID. Equally important, facial liveness ensures that the selfie is of a live, physically present person and not a printed photo, digital replay, or mask of the person. It’s critical for this step to be intuitive and frictionless for users to avoid confusion, frustration that leads to abandonment.
How people send and receive money – from purchasing goods and services to paying bills to splitting a lunch tab with friends is rapidly changing. Biometrics are turning up in a wide range of use cases to address the need for tighter security while ensuring the user experience is fast, convenient, and seamless.
This article is part of the Payment Methods Report 2021 – Latest Trends in Payment Preferences, a comprehensive overview of the payment methods in scope for 2021, as well as best practices for checkout optimisation and customer conversion by addressing digital transformation, security, and localisation. – pe asta il folosim de obicei la PMR 2021.
About Steve Cook
Steve is currently providing global business development for ID R&D, a biometric company focused on developing frictionless authentication and passive liveness detection technologies for identity verification, fraud prevention, and customer onboarding. ID R&D has developed a portfolio of biometric technologies, including face and voice passive liveness detection and provides these solutions to digital onboarding IDV and KYC vendors. Steve has over ten years’ experience in the biometrics industry and owns the Biometrics for eCommerce LinkedIn community news group with over 27,000 members.
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