In this guest blog post our VP Sales Fredrik Sjöholm shares his insight into the growth of biometric payments, detailing the success factors needed for biometric smartcards to achieve their potential in the growing payments space and looks ahead to how this technology can be used in new ways in the future.
Last week I took part in a webinar panel on this topic with Lina Andolf-Orup, Fingerprint Cards; Sara Ellinger, NXP and Alan Goode, Goode Intelligence. This is an interesting topic for me to consider as we’ve been talking about the evolution of biometric smartcards for some time; about what the benefits are for consumers and card issuers and how this technology fits into the wider picture of biometric payments.
The recent research[i]from Goode Intelligence clearly shows that biometrics payments are about to take off, predicting that there will be over 2.6 billion biometric payment users by 2023 driven by factors such as:
- The desire for frictionless authentication while paying in all channels
- The need to reduce payment fraud
- Industry and state regulation
- Technology standardization
Alan Goode explained that as biometrics is one of the few technologies that can support payee authentication and transaction authorization in so many payment channels, it has naturally become an important tool in the fight against fraud in almost all payment channels. Goode Intelligence research showsthat payments have been the major driving force for the wide-scale adoption of biometrics in the consumer market with over 575 million customers already using biometrics on a daily basis around the world to provide secure and convenient user authentication, identity verification and transaction authorisation. Alan expects this trend to continue, forecasting over 1.2 billion users by 2020.
2019 shows real promise for biometric smartcards and there are three areas to focus on to make sure biometric smartcards are successful: they must deliver convenience (the speed and performance has to be very good) balanced with security (this is essential for both the user and the issuer) and it must be easy to introduce into existing infrastructure. This includes areas such as easy enrolment of the users biometric data, being able to offer the cards at an attractive price point and possibilities to produce the cards with standard production processes.
As we’re already seeing with pilots around the world, convenience and security need to be carefully balanced if biometric smartcards are to be successful. Sharing her insights into consumer perception and use of contactless cards, Lina Andolf-Orup explained that a key challenge for contactless card growth is that many consumers feel that the cards are lacking in security. She commented that “in the UK, which has seen a huge adoption of contactless card use, contactless now accounts for more than half of all fraud related to payment cards”. While the convenience of being able to pay small amounts without having to type in a PIN is very attractive, the frustration of the capped limit – about €30 in Europe – and the concerns about lack of security are hindering growth of contactless cards. The answer and indeed the ‘next logical step for consumers’ according to Lina is the biometric smartcard enabled with a fingerprint sensor.
This very much resonates with what we are seeing. In terms of enabling the right balance between convenience versus security for biometric performance and speed, fast fingerprint matching is essential for a good user experience. At the moment it’s about one second, which is quick – much quicker in fact than having to type in a PIN, but of course it is slower than using a non-biometric contactless card – so that’s something that needs to be continuously optimized.
Reassuring consumers about security is also important. In the case of biometric smartcards, an individual’s fingerprint details never leave the card. Talking us through how all this works, Sara Ellinger detailed the importance of storing biometric templates and carrying out the matching process in the card’s Secure Element (SE) – just as PIN codes today – for maximum security.
So where are we going to see biometric cards go next? While payments will be one of the first use cases for these cards, we see that there is a growing interest to use this solution in other types of cards, such as premium and loyalty cards. Financial and social security is also an area that could benefit, for example health services and of course, identity and access cards. Going forward we also recognise that these highly efficient platforms incorporating biometric or fingerprint authentication can be re-used for other devices that require similar limited processing platforms, for example in automotive and for wearables such as rings and smart watches. So there are plenty of opportunities and exciting years ahead.
The full recording of the webinar complete with some lively discussion in the Q&A section is available to watch and you can also download the accompanying Whitepaper, Biometric Payments Come of Age, for more information.
By Fredrik Sjöholm, VP Sales, Precise Biometrics
[i] Goode Intelligence’s Biometrics for Payments Analyst Report 2018 and Biometric Payments Come of Age Whitepaper (free to download)