Biometrics refers to a person’s unique biological data that can be used for identification, such as fingerprints, or a visual image of part of a person, such as a face, eye or hand print.
Biometrics have been used quite extensively in the security industry for decades, particularly in the area of access control, with the technology improving all the time. Fingerprint, retina and hand scanners are in common use, along with newer technologies such as video cameras with facial recognition software to open doors. Usage of these technologies is so familiar that they have become a major plot device in movies, where the hero (or villain!) needs to circumvent biometric access for whatever reason. As any avid movie fan knows, circumventing biometric data is quite difficult, unless of course you have the resources of an international spy agency at your disposal!
Card networks and payment processors want to utilize this technology as a means of authentication to improve payment security and reduce fraud.
There are three primary methods of authentication:
- Something the cardholder has
- Something the cardholder knows
- Something the cardholder is
Biometric data falls into the last method, and could include facial recognition, fingerprints, voice prints, retina scans or hand prints.
Many consumers are already familiar with using biometric data to unlock mobile devices instead of entering PINs, such as fingerprints or using the device’s camera for facial recognition. It is this familiarity that fintech technology stakeholders are counting on in order to drive acceptance of biometric authentication in the payments industry.
Biometric authentication has a place in both the physical brick and mortar world as well as in the digital domain, and each brings different challenges.
In a physical location, the Point Of Sale system needs to include whatever hardware is required to capture the biometric data, such as a fingerprint scanner or a camera. Multiple methods could be used, depending on the application. For example, a fingerprint scanner could be used at a till, but in a drive-through situation, a camera may be a better option.
Hardware is not without it’s disadvantages. Firstly, it is of course a capital outlay, and further would need maintenance and repair, calibration and even replacement for damaged items. Since the Covid 19 pandemic customers have also become a lot more conscious of hygiene and may not want to touch items such as fingerprint scanners for fear of contamination. Merchants and the payment industry need to be cognisant of the health concerns that customers have when it comes to touching items.
In the digital arena the challenges are a little different. At first look the use of cameras and fingerprints seems obvious, and when it comes to mobile devices that may be so, as most modern smartphones come with these technologies already present. However, a great many shoppers use laptop or desktop computers to make purchases. Fingerprint scanners are not inherent in these devices, and while almost all laptops are equipped with cameras, not many desktop computers have them built-in, and the cameras, if there are any, are often external units.
Facial recognition by means of cameras seems at this point to be the most common denominator in terms of digital payments. Mastercards Biometrics Checkout Program is running various pilot programs in 2022 that will provide a great deal of information to guide the future of these biometric payment technologies.
Biometric technologies can do a great deal to reduce the instances of various types of credit card fraud. True fraud could be greatly reduced, but so could other types of fraud. Family fraud, for example, would be far less likely if biometric data did not match. Gone would be the days of a child making in-app purchases on a parents device without anyone realising. And of course, an adult would not be able claim that it was not themselves but in fact thier child who ordered 40 cheese burgers from their local takeaway.
One of the biggest concerns to consumers is the matter of privacy when it comes to biometric payment technologies. Facial images contain a lot of data that may not otherwise be on record. For example, a persons ethnicity may not be an element of data that is captured on original account information, but it would be clear from a picture. Consumers will only want to participate in these programs if they feel that their personal information is safe.
The biometric payments industry is in its infancy, and we can expect rapid movement in this sector over the next few years. There will be various hiccups and challenges along the way, but ultimately biometric payment systems will become the norm in both physical and online shopping.
At Baer’s Crest we understand that the payments industry is constantly evolving. Talk to us about the most suitable and cost effective payment solutions for your business.