Úna Dillon, Managing Director at MRC Europe, elaborates on the key developments in biometric authentication and biometric cards
Biometrics, or the science of recognising people using their physical attributes, has been around since the late 1800s. French policeman Alphonse Bertillon measured prisoner body parts such as height, length of the forearm, and eye colour, to identify repeat criminal offenders – not the immediate biometric authentication we have today but the same concept, nonetheless.
Today, consumers want their online purchase to be fast, efficient, and safe. Online retailers want lower abandonment rates, great user experience (UX), more sales, less fraud, and fewer chargebacks. A Visa survey carried out to research awareness and perception of biometric authentication confirmed people have a strong interest and awareness in new biometric technologies, especially those that make their lives easy and secure.
According to a recent Paysafe research, 61% of consumers agreed using biometrics is much quicker and more efficient. 57% agree that being able to verify a payment using biometric technology would make shopping on their smartphone more convenient than traditional desktop ecommerce. 65% agreed automated payments mean less time at the checkout.
Why develop biometric authentication?
Strong customer authentication is mandatory for all electronic payments in the European Union (with some exceptions such as risk assessed transactions, low value amounts, recurring sales) so retailers increasingly need to use modern technology to verify the person at the other end of the transaction.
Consumers are accustomed to using fingerprint technology, e.g. unlocking smartphones. Consumer device cardholder verification method – or CDCVM – works when consumers use their smartphone to authenticate payments initiated from their laptop, without a fingerprint sensor; similarly, when customers in store tap and go, at the Point of Sale, with their smartphone and authenticate the transaction using fingerprint.
For mobile payments, the UX depends on the mobile platform provider, e.g. ApplePay, Samsung Pay, etc. Visa Checkout and MasterPass are now compatible with these. As consumers increasingly use their smartphones for shopping and banking, companies are rapidly leveraging biometrics for payments and money transfers.
According to a Juniper Research Study, mobile biometrics will authenticate USD 2 trillion in remote and in-store payments in 2023, up from an estimated USD 124 billion in 2018. They predict fastest growth will come from biometrically-verified mobile commerce transactions which will represent 57% of biometric transactions in 2023, up from 28% in 2018. It is estimated roughly 90% of smartphones can support facial recognition, and 80% can support voice-authentication. The research forecasts over 1.5 billion active smartphones will use software-based biometrics by 2023.
As for the development and use of the biometric card, one area explored by card issuers is the adoption of fingerprint recognition for contactless card payments in place of PINs. The biometric card uses a fingerprint sensor right on the card and the consumer pays with a simple touch. Retailers love this one as terminals don’t need to be upgraded. Like facial recognition, the customer’s fingerprint scan on the sensor is compared with the fingerprint biometric data securely stored in the card.
Facial recognition has come a long way. Early issues were solved in the last decade including image capture, now with more sensors, and image exposure correction. What is being analysed here? The distance between the eyes, width of the nose, position of the cheekbones, etc. These quantities are then combined numerically in a single code that uniquely identifies each person. In the Mastercard app for example, face recognition is enhanced by facial expression recognition as the application requires the consumer to blink to prove they’re human. Facial recognition holds great promise, but perhaps not right now while we’re all wearing masks!
Alipay ‘smile to pay’ feature compares the consumer’s face with the one stored during the onboarding process. This is now the norm in the Chinese market.
Banks across the world are now also using facial recognition as a first authentication factor. Fingerprinting and voice recognition are second and third factors. We are seeing concepts in the market where the smartphone is used as a biometric authentication hub, i.e. using the smartphone like an RSA token.
Retina scanning (iris recognition) uses consumer patterns that can’t be replicated. The challenge is remaining in one position while taking the scan, plus the camera resolution and general quality. Companies such as Alipay and Wells Fargo currently use iris scanning for authenticating customers.
Voice recognition meets a factor requirement when several factors are required to authenticate the payer. It can be time consuming though and if the consumer is paying in-store it can be an embarrassing experience. 100 million users worldwide now have some form of voice-activated Smart Home technology such as Google Home or Amazon Alexa, so consumers are adopting the hardware that will enable them to shop online and pay bills using voice command alone.
Electrocardiogram (ECG) authentication – can this be the new password? The consumer wears a band that can authenticate them using a variety of biometrics, including heart rate. Effectively, it turns the consumer’s heartbeat into a unique key that can be used to authenticate them to make a payment, unlock a device, etc. The technology could allow retailers to know their customer, before they’re told, e.g. imagine walking into a restaurant and they already know your seating preferences and dietary requirements.
The payments industry has been developed due to three main things: technological innovation, regulation, and consumer appetite. Adoption of biometric verification will accelerate as consumers become more familiar with the options available to them.
This article was published in our Payment Methods Report 2020, an extensive overview of what’s new in how people pay in the most relevant ecommerce markets.
About Úna Dillon
Úna is a regular public speaker on payments and has chaired working groups for organisations including the EPC. She ran Laser Card, the Irish debit card scheme, for 12 years and was Head of IPSO Card Services, responsible for driving the development of policy on major initiatives such as SEPA.
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