While biometric authentication technology has been around for over two decades, it has taken some recent developments to make fingerprint verification for card-based payments a workable reality. It was only with emergence of ultra-thin sensors that could be embedded into smart payment cards, together with the required microprocessors, that it finally became possible to design biometric cards that would enable on-card fingerprint enrolment and verification.
This breakthrough led to Absa piloting the world’s first biometric card in South Africa, in 2017. In the following year, the Bank of Cyprus piloted the world’s first biometric dual interface card for both contact and contactless payments. Throughout the pilot programmes, card payments could be made using fingerprint verification to authenticate a transaction.
Since then, improvements in the speed and accuracy of biometric technologies, together with manufacturing refinements, have helped reduce the per-unit production cost of biometric cards. These changes, combined with the standardization of EMV and ISO certifications, have prepared the way for the mass commercial deployment of biometric cards.
Today, the 20 biometric card pilots currently underway around the globe, as well as the first commercial deployment by BNP Paribas, followed by product launches of Crédit Agricole and Bank Pocztowy, indicate that the momentum created by these projects mean the market demand is set to experience a significant and rapid growth.
The COVID-19 pandemic has accelerated the adoption of contactless payments by consumers who now want low or no-touch interactions at the point of sale. Meanwhile, familiarity with fingerprint authentication technologies that make it quick and easy to unlock smartphones has fuelled the growth of consumer demand for biometric payment cards that offer the same frictionless user experience.
Indeed, according to a recent Visa study conducted on US consumers, 86% of respondents were interested in using biometrics to verify identity or make payments. The same research also found that more than two-thirds of consumers prefer to pay with contactless cards rather than using a digital wallet on their mobile device.
With so many consumers ready and willing to embrace biometric contactless payment cards, banks are responding to this pent-up demand. 2021 saw first major banks undertaking large-scale commercial deployments with their rollouts of biometric cards to customers.
For many consumers, the top benefit offered by biometric payment cards is the convenience of being able to make fast and secure contactless payments, with no limit on the maximum amounts currently imposed by regulation. In other words, using biometric payment cards enables consumers to authenticate higher payment amounts by means of fingerprint verification, eliminating any requirement to insert their card or enter a PIN when paying for larger transactions at the POS.
Alongside this improved user experience, biometric payment cards provide a deep reassurance that contactless cards cannot be debited without their consent and that lost or stolen cards cannot be used fraudulently. The fallback of being able to use a PIN, should a sensor be unable to read a fingerprint, also gives consumers the confidence of knowing they will get to use their card, regardless of the circumstances.
Finally, for many consumers, a biometric smart card containing a fingerprint that is stored and verified in the chip delivers an improved perception of security, compared to using their mobile phones, which are often viewed as being prone to malware attacks.
When users receive a biometric payment card, they will first need to register their fingerprint into the card. This enrolment process can be carried out at home, using a sleeve device that is shipped with the card, or cardholders can visit a bank branch. At the time of enrolment, no biometric details are ever transmitted online or to any other device other than the card itself. This implementation approach delivers full compliance with GDPR mandates on the processing of biometric data.
Once the enrolment is completed and the fingerprint in the biometric card has been activated, the fingerprint data remains securely stored in the card’s chip. When cardholders want to make a payment, they simply pass their card near the contactless payment terminal and place their finger on the sensor of their card to perform the biometrics verification.
Fully operable with today’s payment POS terminals that accept EMV-based contact or contactless cards, biometric payment cards offer a convenient and easy-to-implement solution to verify contactless payments for today’s consumers. Delivering against consumer demands for reduced physical interactions and faster payments at the POS, biometrically enabled payment cards are now transforming how users can seamlessly undertake the authentication of their everyday payments.
As central banks gear up to issue digital currencies, biometric card authentication may also enable cardholders to securely pay using digital and cryptocurrencies.
This article was first published in Payment Methods Report 2022, the most updated overview of trends and developments in the payment methods space and the innovative technologies that these methods work upon, emerging consumers habits, and strategies on how to win at conversion and retention.
With over 20 years’ experience working in the payments industry, Andreas Strobel has been an active participant of SPA since 2006. In addition to his current role as SPA President, he acts on behalf of SPA as a member representative at the European Cards Stakeholders Group (ECSG) in Brussels where he was also previously part of the Audit Committee.
The Smart Payment Association (SPA) is the trade body of the cards and mobile payments industry. SPA addresses the challenges of a fast-evolving payment ecosystem, promoting innovation, security and interoperability of payment instruments. SPA works closely with regulators and standardization bodies, offering leadership and expert guidance to help its members and their customers adopt new payment technologies of today and tomorrow.
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