Consumers are more accustomed to using biometric authentication, which may pave the way for using this technology to authorize payments.
Consumers are growing more and more comfortable with biometric technology. Many of us are now using our fingerprints to unlock smartphones and open apps that contain sensitive information, for example, when mobile banking. Others of us may also use biometric technology to verify our identities when we receive medical treatment covered by a healthcare plan or to gain entry to a restricted area of our workplaces.
Biometric technology has proven effective at protecting unauthorized access and verifying a customer’s identity – but will it continue to gain traction as a method of authenticating payments?
The analysts at Juniper Research have concluded that it will. In fact, they expect biometrics will authenticate $2 trillion in in-store and mobile payments by 2023 – that’s 17 times more than in 2018. Juniper Research also predicts that mobile commerce (mcommerce) transactions verified with biometrics will grow to $48 billion, accounting for 57 percent of all biometric transactions.
Biometric authentication is more than just a fingerprint.
Although consumers are most familiar with biometric authentication via fingerprint, other options for biometric payments include the following.
● Iris or retina – Each human eye is unique, and by measuring its features and creating an image or template for comparison, iris and retina scans provide a highly reliable form of authentication. One use case in particular that can benefit from iris or retina scans is when verifying online retail and banking customers’ identities.
● Facial recognition – Businesses on the cutting edge are already testing facial recognition transactions. For example, CaliBurger in California doesn’t accept cash or credit cards. Guests register then use facial scans to pay. This payment method was particularly beneficial during the pandemic, allowing customers to enjoy completely touchless transactions.
● Voice – Machine learning (ML), artificial intelligence (AI), and natural language processing (NLP) have enabled technology such as voice assistants. That technology also has the potential to facilitate payments and authenticate the user. For example, Tesla is exploring one use case whereby drivers pay for fuel by voice.
● Behavioral biometrics – This branch of biometrics analyzes users’ behaviors, rather than verifying a distinguishing characteristic. These systems may learn the patterns that people use when typing on a keypad or writing their signatures, including how hard they press a screen with a pen or how fast they sign.
The benefits of biometric authentication.
Biometrics can bring a variety of advantages to payments companies, merchants, and consumers. Consider how other types of payment verification compare to the list of benefits below.
1. Difficult, if not impossible, to defraud.
Biometric markers are unique to each user, so only the consumer whose fingerprint, face, or other identifying characteristic matches can authorize the payment. Additionally, systems are getting smarter, leveraging AI to detect when someone is attempting to use an image rather than their actual face or fingerprint to charge someone else’s account.
2. Frictionless experiences for consumers.
The payments industry is working hard to make payments as easy as possible for consumers, removing as much “friction” from the process as it can to enhance overall customer experiences. Biometric authentication doesn’t require consumers to carry a card, remember a PIN, or even unlock their smartphones. An authorized way to pay is always with them, and payments are quick and easy.
3. Stable authentication.
Another advantage is that biometrics don’t expire like credit cards or some app authorizations. Once the consumer’s biometric identification is authorized, they can make purchases indefinitely.
4. Greater security.
With biometric authentication, consumers, merchants, and banks can all rest easier, knowing that payment accounts are more secure. Cards and smartphones can be lost or stolen. Digital payment data can be hacked and used online. Even PINs can be swiped by someone looking over a consumer’s shoulder. Biometric authentication helps prevent all of these types of fraud.
5. Cleaner data.
Merchants analyze payment data, along with data from their point of sale (POS) systems, loyalty programs, and other sources. However, it’s not always clear who is making a digital payment. For example, is a teenager using the account to purchase the garment, or is it a parent choosing it as a gift? With biometric authentication, merchants will always know which authorized user is behind the purchase, while gaining a clearer picture of their customers’ demographics and behaviors.
Will biometric payment authentication become mainstream?
Although the U.S. trails some other countries in adoption, familiarity with biometric technologies is growing. Statista reports that in 2019, 87 percent of U.S. adults were aware of facial recognition technology, and Visa helped raise awareness by implementing biometric payment technologies in its “Cashless Japan” initiative for the Tokyo Olympics in 2021.
Technology adoption of any kind takes opportunity and interest for users to try it and develop habits around it. Now more than ever, biometric authentication is becoming a tool that more people use in their daily lives. It’s likely those chances to use fingerprints, iris scans, or facial and behavior recognition will make people more comfortable with the technology. It’s equally likely consumers will recognize how easy, fast, and secure those authentication methods are. That will pave the way for even more growth in biometric payment adoption.
