Biometric payments – bank priorities vs consumer perceptions

Biometric payments – bank priorities vs consumer perceptions

Lina Andolf-Orup

Senior Director and Global Marketing at Fingerprints

Views 444

Biometric payments – bank priorities vs consumer perceptions

10.09.2019 12:30 pm

When it comes to new payments technologies, it’s often difficult to know what consumers are thinking, and banks have a lot on their plates. When introducing new solutions and services, aligning a bank’s transformation strategy with the desires of consumers is an interesting chart to plot. Following our consumer research, we recently set out to understand how the opinions of banks compared - including understanding the importance placed on biometrics and why.    

One thing that’s clear is that both banks and consumers have embraced contactless. As one of the biggest changes to payments in recent years, it’s now almost ubiquitous in several markets, with usage rising year-on-year.

With technology advancing however, biometric payment cards are set to be ‘the next big thing’. Offering the ability to move away from payment caps, while improving security and convenience, the draws for banks are clear. And many are now looking to deploy them sooner rather than later. However, when comparing banks’ priorities with our consumer research, there are both similarities and differences worth aligning.

It’s all about contactless, but…

The one thing that everyone can agree on is the importance of contactless payments. Both banks and consumers consider them to be the most important payment method. Whether this is through a card or a mobile, the days of mag stripe (and, dare I say Chip & PIN!) are numbered.

88% of the banks we spoke with agreed that contactless is the main payment priority in the coming years.

However, there is one striking difference between consumers and banks when it comes to contactless payments.

For the banks, the biggest issue with contactless is being able to lift the payment cap, but security is consumers’ main concern.

38% of consumers see security as a key barrier to using the technology, with 51% being worried or very worried about fraud.

This is not to say that banks are not worried about security and fraud – after all, it’s the banks that accept the liability for the new wave of contactless card fraud. Rather, the benefits and return of offering contactless outweigh the cost of fraud. 

But, there is an opportunity for banks here.

Introducing biometric payments can help address consumers’ security concerns while empowering banks to finally lift the payment cap. The widespread proliferation of biometrics for smartphone authentication means consumers are comfortable with the technology. Plus, with added security, it can finally enable those high-value contactless payments, creating a win-win for both banks and consumers.

When it comes to using biometrics on contactless cards, 50% of consumers said they would even be willing to pay for the technology.

There are still concerns to be addressed, though, particularly around privacy and where the fingerprint data is stored. But this is largely a challenge of education, not of technology – all data stays on the card itself, meaning it never leaves the consumer.

What’s clear from our research, though, is that consumers consider biometric payment cards more secure than standard contactless payment cards.

So, what else are banks and consumers thinking when it comes to biometric payments?

Let’s talk about UX

User experience is a priority for both parties too. Banks and consumers recognize that biometric cards uniquely balance both convenience and security. But what’s more, both recognise the importance of having a smooth enrolment process that consumers can manage themselves.

Sure, perfecting the day-to-day payment experience is essential, but if the initial enrolment is difficult, clunky or confusing, the concept will fail before it has started.

79% of banks see biometric card self-enrolment being key, which is aligned with the consumers’ view.

Getting this right and making sure consumers are able to self-enrol will be crucial to driving adoption and promoting word-of-mouth advocacy.

Everyone is (almost) on the same level

When it comes to biometric payments, it seems that the banks have a good idea of what their customers are thinking. Ease of use, a move away from payment caps, and the ‘coolness’ factor are the major selling points for both consumers and banks, but educating consumers around security remains key.

With biometrics, banks can offer consumers both peace of mind from fraud, as well as an enjoyable and convenient UX. In short, the technology is now in place to enhance trust in contactless and help it reach its full potential.

Latest blogs

John Jannes IHS Markit

Best Execution in the US: Three Things Broker-Dealers Need to Think About​

As we head into 2020, US broker-dealers are preparing for new mandates on how they report transactions back to customers. The requirements – established by the Securities and Exchange Commission’s (SEC) updates to Rule 606 – aim to bring investors Read more »

Nish Kotecha Finboot

Blockchain’s role in energy supply chains and the fight against climate change

Two topics dominated September’s UN General Assembly, at times provoking fiery debate. World leaders gathered in New York amid simmering tensions in the Middle East. The recent attacks on key Saudi Arabian oil facilities prompted questions about how Read more »

Denis Novikov Qulix Systems

How Can Digital Customer Onboarding in Banks Increase Sales and Build Loyalty?

While banking product portfolios tend to become similar, banks must select between 2 most popular strategies (or combine them): to compete in pricing or to focus on customer experience improvement.  If you prefer the first strategy, you may skip Read more »

Nick Ogden Worldpay

Worldpay founder Nick Ogden tops Payments Power 10 and other highlights from PayExpo 2019

Last week, fintech, banking, retail and gaming professionals attended the UK’s largest payments event, PayExpo 2019. Event attendees visited a series of conference sessions, debates and networking opportunities – and start-ups had the chance to Read more »

Lina Andolf-Orup Fingerprints

Finger on the pulse! The Countdown to 2020 has Begun

With 2020 in sight, now is the perfect time to pause and reflect on the past three months and see how the world of biometrics has evolved since our last update. With everything from high profile announcements to some news you may not have heard, Q3 Read more »

Related Blogs

Hardik Shah Currencies Direct

Security vs user experience – Are frictionless payments eroding the barriers between risk and usability?

With the advent of the smartphone, and the rise of interconnected devices we’ve seen the creation of a world where practically everyone has instant online access 24/7. In turn, we’ve seen rising demands from consumers for quick and easy access to Read more »

David Orme IDEX Biometrics ASA

Happy tapping: why it’s time for a more secure solution to contactless fraud

Since their launch in 2007, contactless cards have revolutionised the payment industry. Contactless payments overtook chip-and-PIN as of July 2018, with more than 52% of the UK’s monthly card transactions conducted through a contactless card. Read more »

Stéphanie El Rhomri FIME

Smartcards (finally!) get smarter: innovation in payment cards

Since the launch of contactless just over a decade ago, innovation in payment cards has struggled to keep pace. While card payments themselves have steadily risen, in an increasingly mobile and digital age, many are already predicting the death of Read more »

Zac Cohen Trulioo

Businesses struggle to cope with major new regulation

One of the most important pieces of legislation created to crack down on cyber fraud has come into force. Strong Customer Authentication (SCA) is a critical part of the Second Payment Services Directive (PSD2). This legislation comes at a time when Read more »

Suresh Vaghjiani Tribe Payments

Innovation feast or famine: Why payment companies need a “modular” mindset

In the world of payments, introducing new services is a tiresome and complex process. Having a fast, agile response to market and customer demands is near-impossible. While the fintech revolution has made every payments firm want—and need—to Read more »

Magazine
ALL
Free Newsletter Sign-up
+44 (0) 208 819 32 53 +44 (0) 173 261 71 47
Download Our Mobile App
Financial It Youtube channel