Biometrics to drive growth of mobile payment globally

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The proliferation of internet, mobile phones and cloud computing have made the payment industry continuously suffer due to breaches, hacking and theft. Global economy has suffered loss of over $500 billion due to cybercrime, affecting anywhere between 750 – 900 million people.

In response, Biometrics is emerging as an advanced method of authentication and verification for secure payments.  It involves using physiological and behavioral characteristics like palm, voice, iris and face for authenticating individuals to offer safer payments. Smartphones and other hand held devices equipped with touch screens, microphones and high-resolution cameras have led to the biometric payment boom.

Biometrics are founding increased acceptance in mobile payment and other payment channels. Amongst developed countries, Japan tops the chart of biometric used by banks. It has more than 80,000 ATMs that use biometrics like palm or finger vein scanning to identify accountholders.

Similarly, USAA bank, a US bank, provides fingerprint, face or voice recognition to more than 400,000 customers for authentication at the company’s mobile app. Also last year,  MasterCard partnered with First Tech Federal Credit Union to launch one of the first US biometrics payments pilot, referred to as “Selfie Pay”, that let consumers make any form of payment, whether in person or online, as secure as possible.

While in the UK, Barclays has already introduced voice recognition for users of its telephone banking service, as well as finger vein biometric scanners. The voice recognition system verifies customers based on their speech patterns and is being initially offered to Barclay’s Wealth customers, with the rest of its 12 million customers to follow later this year.

In rest of the Europe too, biometrics has been picking up. In Poland, about two thousand cash machines have been equipped with finger vein technology, allowing people to scan their finger to withdraw money from an ATM without a card or PIN number, while Sweden also has payment machines that facilitate money withdrawal using fingers veins for authentication.

Developing Asian economies like Malaysia, the Philippines and Indonesia are also witnessing upsurge in biometric ATMs from banks. Citigroup recently announced that it was the first major bank in Asia to roll out voice recognition technology to its retail customers, part of a move to upgrade its Internet and mobile banking offering across the region. The bank plans to have at least 1 million Asian users of the technology within the next 12 months.

Recently Payments Association of South Africa (PASA) collaborated with Visa and Mastercard to develop a standard for biometric authentication for payments in South Africa.   The collaboration is intended to facilitate interoperability. Though the initial focus of the standard will be only on fingerprint biometrics, but eventually it intends to cover palm prints, voice, iris and facial recognition, and other forms of biometric data too.

This new ISO and EMV compliant standard is intended to make the consumer transactions seamless and secure across the nation.  Also, consumers will be benefitted from exchange of payment instructions across different banks.

PayNXT360 believes biometrics would be one of the key drivers for growth of mobile payment industry globally. The adoption of biometrics authentication process in traditional payment channels will help adoption in mobile devices for payments. More importantly, standardization of biometric payment system will enable scalability of biometric verification. Also, the enhanced customer experience with simplified processes and lowered turn-around time promises biometrics as the disruptive technology for payment authentication.

To know more and gain deeper understanding of mobile payment industry, click here.