• Vince Graziani, CEO at IDEX Biometrics


• 15.11.2022 01:00 pm
undisclosed

Mastercard’s recently launched biometric payment system shows the growing demand for more secure payment methods, beyond traditional chip and PIN authentication. Biometrics are increasingly becoming embedded into society, with stronger customer authentication requirements and more consumers relying on the appealing benefits of increased security, reliability and convenience. As a result, biometric smart cards are soon set to be a part of our daily life.

However, as is often the case with new technology, biometric card payments are sometimes misunderstood, and some myths and misconceptions still persist around biometrics.

To avoid misapprehensions about the physical biometric smart card as a product, its transactional processes, infrastructure and support, let’s break down a few common misconceptions surrounding fingerprint biometric smart cards.

1. Payment cards continue to grow

Globally payment cards are growing, showing the desire for contactless authentication among consumers. The number of payment cards in circulation worldwide grew by over two billion between 2019 and 2021 and is forecast to further increase. In fact, the global card market is expected to grow by 9.6%, from $251.33 billion in 2021 to $275.5 billion in 2022.

One of the fastest-growing card market regions in the world according to ‘The Global Payments Report’ is Latin America with a projected CAGR of 19% through 2025.

Despite the expected growth of biometric smart cards across all markets in the coming years, a few common misconceptions remain. As a result, some consumers may feel apprehensive about using the technology, especially as it enters more sensitive, personal areas, such as financial services.

2. Demystifying point-of-sale terminal systems

One of the biggest myths is the idea that banks and retailers need a new payment infrastructure to accept biometric payment cards. Fingerprint smart cards will function with current contactless ATMs and existing in-store Point-of-Sale (POS) systems, and is already working across more than 40 million acceptance locations worldwide. This means consumers can use contactless technology with fingerprint authentication for secure end-to-end contactless cash withdrawals and in-store transactions for any amount, without the need for a PIN.

It’s not only card-present transactions that benefit from fingerprint biometric security. Fingerprint authentication biometric smart cards combined with the NFC field on a smartphone can be used for multifactor online authentication. This allows for secure e-commerce or card-not-present transactions and online banking access through payment card authentication.

While fingerprint biometric smart cards are primarily thought of as a payment technology, their authentication potential goes far beyond payments. Biometric smart cards can also provide digital authentication for physical and virtual access, such as to offices and company networks, transport or event ticket systems. Their ability to combine government IDs, healthcare access and payments, all into one convenient and secure digital identity card could also address rising demands for global digital identity solutions, the market for which is projected to grow to $49.5 billion by 2026.

3. Reducing cybersecurity fears

As security breaches continue to hit headlines, the public has become ever more aware of the need for data security – particularly around their biometric data. Storing biometric data in a centralised database can be a challenge and a risk. In IBM’s recent global Cost of Data Breach Report, 83% of organisations said they have had more than one data breach, putting sensitive information at risk. A common misconception is that biometric data for fingerprint payment cards is stored on a central database, which has the potential to be hacked, but this is not the case.

Instead, upon registration with a smart card, the owner’s fingerprint image is immediately transformed into an abstract biometric certificate via encryption technology. This is then stored in the secure element of the card’s EMV chip and the owner’s data never leaves the card – making it extremely secure and reassuring.

Along with security concerns, centralising biometric data is inconvenient – requiring the user to visit a secure site to register the fingerprint to be matched to the card. Instead, with user data encrypted and stored on the payment card, the user can register their fingerprint at home through a remote enrolment process that also eliminates the risk of online hacking. The user remains fully in control of their data – a critical aspect for many consumers.

4. Seamless customer journey from registration to transaction

The simple enrolment process breaks down a friction point associated with biometric fingerprint registration. Card enrolment captures the fingerprint image – as you do when registering it for a smartphone. The image is then encrypted and stored in the matching template held in the secure element on the card. Registration can be carried out through a variety of means, including smartphone registration, at a payment terminal or via an enrolment sleeve provided by card issuers. Regardless of the method, the registration process is secure and seamless.

Once registered, no battery is required as the card draws the power it needs for biometric authentication and secure communications with the POS terminal directly from the payment terminal itself, even when operating in contactless mode. 

Another common concern is that a fingerprint won’t be seamlessly recognised at the point of transaction due to the sensor capturing the wrong angle or the fingerprint being slightly wet or dirty, requiring multiple attempts. However, biometric smart cards are designed, tested and certified to endure real-life circumstances balancing security and user experience.

Further, advanced technology anti-spoofing methods prevent any cloned or fake fingerprints to be accepted. Hence the combination of the fingerprint sensor, the biometric authentication algorithm, and the spoof detection system reduces any risk of false acceptance and delivers a flawless, secure user experience.

5. Decreasing cost of card

Finally, there is the matter of cost. Many believe biometric cards will cost more than existing bank cards due to the complexity and engineering sophistication of the technology needed in biometric development. While this is true, cost will significantly fall with increased volumes and higher market penetration – which will bring savings and economies of scale. With the average lifetime of a card getting longer and the upfront cost being absorbed over at least 3-4 years, there is already a trend towards more sustainable and longer-lasting cards.

Already today, there are still substantial ROI and customer satisfaction opportunities from smart card investments. IDEX research revealed 70% of consumers would be willing to pay a fee for a more secure bank card. Additionally, such cards have been proven to increase satisfaction and transaction volumes due to the top-of-wallet effect, stickiness of users (tendency for repeated use) and their appeal to new customer audiences.

The benefits of biometric payments

Biometric smart cards bring many added benefits to our lives and could ultimately introduce savings in the long run by increasing payment card security and reducing the costly threat of card fraud. When we set out the truth of biometric payment cards products and processes, it’s clear the technology has the potential to bring greater security and convenience to our payment transactions.

As biometric technology evolves, its inclusion in the payment ecosystem will make one of our most everyday experiences of paying not only more secure, but also easier and more reliable.