Biometrics can be the answer to a more secure and faster system where monetary transactions are done via the mobile phone. Indeed, biometrics is bound to witness a rapid surge, particularly in the financial sector, with banks developing new technologies to protect individual data and improve customer experience when money is being transacted.
What is exactly is biometrics and authentication?
Basically, biometric authentication is the use of biology and technology for security purposes. By the year 2020, it will replace ID cards, PINS, and passwords that are actually used for gaining access to bank accounts or into any digital system. A simple example can be the authentication of a user’s identity before he/she is allowed to use a credit card to pay for a product or retrieve the money. The verification here can be done through fingerprints, facial, voice or iris recognition. Mostly for online transactions via smartphones, biometrics can really revolutionize the market and make chip cards obsolete.
It is mostly a question of security
The internet, smartphones, and Wi-Fi are expanding the frontier of a new world where everything is done with the simple touch of a button or tap on a screen. Since it is easy for users to pay with their mobile phones via the internet, it is also easier for someone to hack into your system and do whatever they want. And that is why biometric is crucial for the future development of mobile phone payment. A strong and unbreachable network is the key to reassure people to use their phones for any type of transaction.
Biometrics essentially mean more advanced methods of authentication
With the banking and airline industries falling prey to cyber-attacks during the past years, the need for stronger authentication methods for payment has become essential. Be it the retail, entertainment and hotel sector, verification barriers such as biometrics can help protect them from breaches and frauds. Although much needs to be done in terms of research and tests, the potential is there.
What are the advantages of the biometric system?
Be it the bank or customers, biometric authentication brings a wide range of benefits. It will inevitably give a competitive edge as better security increases trust, thus improving business opportunity. Additionally, it will solidify and simplify the proof of identity procedures. There is also the question of fraud detection and improving identity management, which is vital for banks. As a matter of fact, when combining biometrics with other developing technologies, we can improve transparency, data analytics, and real-time risk assessment. Finally, it will definitely increase efficiency by reducing cost, enhance internal control and facilitate auditing.
Customers want a more sophisticated mobile payment experience
Retailers have to take into account the changing behavior of customers when it comes to a mobile transaction. Obviously, the more advanced the technology, the more businesses have to adapt to these innovations. Smartphone users are always on the lookout for smoother and more effective shopping experiences. Since traditional payment method is a complicated ecosystem, service providers have to come forward with new ideas and technologies that is simpler for users to understand. With biometrics, consumers are looking for an improvement in mobile payment solutions. For businesses, a fully secure, upgraded and sophisticated mobile shopping will be the key to people’s acceptance of mobile payments in the years to come.
The next couple of years will be crucial for biometrics
Biometrics is going to be the most important mobile payment in 2020. As per Acuity Market Intelligence, the use of biometrics to protect mobile payments will affect more than 65 percent of smartphone users. With an expected revenue of more than 34 billion dollars, mobile payments will dominate all means of monetary transactions in the future. BI Intelligence and Juniper Research are positive that in the next couple of years the number of users is forecasted to be around 99 percent in the US alone and that at least 770 million biometric authentication apps will be downloaded every year.
Your body parts are your new passwords
Indeed, your body parts will one day replace traditional payment systems and become your new password. Apart from being secure, the convenience and advantages biometrics give people is one of its key points. Biometrics allows users the leisure of not needing to remember complicated and long passwords since the fingerprint doesn’t require any memory and is a part of the body.
Biometrics is worlds apart compared to chip cards
Indeed, chip cards like EuroPay, MasterCard and Visa have the necessary protection for your peace of mind. However, with hackers trying to find more intelligent and innovative ways to break into accounts, the chip card will soon become obsolete. With biometrics, things get way more complicated for hackers as it is much more difficult when body parts are used for authentication. In the near future, banks will be more equipped to prevent fraud with biometric credit and debit cards that are fingerprint-activated.
It is more than just fingerprints
Apart from fingerprints, biometrics also permit the use of voice, facial recognition and iris validation for authentication. Banks, financial institutions, and others are pouring a lot of money on research and development to upgrade the payment system. While MasterCard is trying facial recognition, Alibaba is combining the use of selfies for facial identification. Mobile phone giants like Samsung Pay is developing fingerprints, voice and iris recognition. On the other hand, Apple Pay has already adopted and put fingerprint authorization into practice.
What are the risks of biometrics?
Although biometrics provide a great deal of protection, it does have certain disadvantages. As such, hackers have used photographs to get past facial and iris recognition. And in case your mobile phone gets stolen, your recorded voice and selfies can easily be used for biometric authentication. There is also the risks your biometric data (for example your fingerprints) being illegally used by carriers. In fact, that is the main challenge of those trying to develop this system – making it stronger and more secure.
A strong biometric authentication barrier for mobile payment is the future
If in the past, fingerprint recognition has been the preferred option in the financial sector, now investors are ready to look for more effective and solid payment system. Banking and other financial institutions will greatly rely on biometrics to enhance the customer experience. Apart from protecting customers’ money, a reinforced payment system will also protect the bank’s data and make it tougher for anyone to hack into the system. Much of the attention and focus will be on biometrically-enabled smart mobile devices, biometric sensors, biometric app downloads, direct purchase, software development, biometrically-secured payment, and non-payment transactions.
What is the ‘Selfie Pay’?
MasterCard already tried the ‘Selfie Pay’ (also known as the MasterCard Identity Check) in 2016 by using facial biometrics for payment authentication in central European countries like Belgium, Germany, Spain, the UK and many more. By just showing your face on the smartphone camera, one can instantly confirm an online payment. The app also supports fingerprint biometrics for authenticating mobile payments. Users can choose between the facial recognition or fingerprint to pay for products, improving the convenience and rapidity of online mobile transactions.
A secure mobile payment system can help small businesses
Biometrics can be of enormous help to small businesses around the world. A secure mobile payment system can help them compete in the global business environment, mostly through online opportunities. Since the future of payments is the mobile phone, customers can order and pay online for items that are not mass produced. Small entrepreneurs offering unique or handmade products can reach their customers and ensure that all transactions are made via a secure line and that both parties receive their due.
There are successful uses of biometrics in various industries
Since the security and safety settings of biometrics are applicable to all industries, there are many organizations that have successfully tried and adopted the system. Areas like healthcare have adopted biometrics to their fullest degree and improved their patient’s security while at the same time limiting liability. Hospitals use advanced authentication systems in their laboratories to restrict access to unauthorized personnel and patients. Additionally, there are some governmental institutions that already have facial and iris recognition to protect access to their buildings. They are the example that biometrics can be useful and successful if adapted to a particular need and purpose. In fact, if and when mobile payment conveniently marries biometric authentication, then its implementation in sales and other spheres will be inevitable.
Biometric authentication will continue to grow
A 2017 study conducted by Juniper Research says that by 2022, more than 53 percent of global monetary transactions will be contactless, that is done via mobile phones. Although the market is currently dominated by Apple Pay, consumers are eager for more of this type of payment. And, with biometrics ensuring safer and more secure transactions, consumers will be ready to adopt or download apps that promise faster and simpler mobile payment methods. The author of the research, Dr.Windsor, says that “While U.S. card issuers haven’t yet made contactless a priority, the extremely positive response across Europe, both from merchants and consumers, suggests the U.S. would see very rapid migration at POS if and when contactless cards become mainstream.”
The solution is to create the right balance between convenience and security
For biometric authentication to fully integrate mobile payments, there should be an equal balance between convenience and security. “Typically, the more secure the solution, the more time-consuming the authentication process. It is essential to offer a range of verification options allowing clients to determine what level of security is required for a given authentication” added Dr. Holden. Indeed, if the authentication process is too time-consuming, users will easily get annoyed. Service providers should find ways to improve that aspect of the payment system, where it is possible to go through the authentication process in less than a minute.
The digital payment landscape is rapidly changing
According to Capgemini Financial Services Analysis, a 2016 research shows that people using their mobile phones and other wearable technology to make payments could reach 95 billion dollars in 2018. In 2015, the annual figure showed 35 billion dollars, proving the massive change that digital payment has gone through these past 3 years. A Senior Vice President at Leading Payments Processor added that “technology, demographics and shifting consumer behavior have opened the door to a transformative period in digital payments.” The adoption of new technologies in Asian countries is also a driving factor in this shift, as the emerging market moves towards mobile payment strategies to improve the user experience.
Banks have to adopt a new approach to welcome mobile payments
To successfully integrate biometric authentication with mobile payments, banks need to adopt new governance models. Be it the recruitment of skilled staff, improvement, and efficiency of compliance data collection, financial institutions have to be ready to deal with all the challenges that this new system brings. They will have to focus more specifically on data warehousing, analytics, and compliance testing. Additionally, there will also be a huge investment in structural change and most probably be partnering with mobile phone giants to begin the transition towards mobile payments.
Users are more than ready to accept biometric authentication
A research by Visa suggests that most consumers in Europe are ready for biometrics identification in order to pay via smartphones. In fact, a bit more than 75 percent of people surveyed believe in the security of biometric authentication for mobile payments. Smartphone users around the world are growing increasingly eager about the new payment system and how it will facilitate their lives by improving the shopping experience. Although most surveys target the younger generations, older customers still like the old person to person payment experience.
Biometric authentication is going to revolutionize mobile payments
Be it facial identification, fingerprint check or voice recognition, biometric authentication will be as normal and as rapid as entering a PIN code or password for any type of transaction, monetary or not. Although more tests and trials are required until the system is perfect, we know for sure that it is going to be the future of mobile payments.
Article published in Mobile payment
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