The lowdown on biometric payment cards

What exactly is a biometric payment card?

Biometrics have been hugely successful in mobile devices, and the technology has now been adapted to seamlessly integrate into credit and debit cards. But it’s not as simple as it sounds, as the sensors needed a complete redesign to be ultra-thin, have ultra-low power consumption and be ISO and payment system compliant while maintaining maximum performance.

Specifically, biometric payment cards have an integrated fingerprint sensor, used to authenticate transactions. This allows a truly intuitive method of identification, replacing PINs and signatures, and elevating contact and contactless payments to new levels of security and convenience. They are set to become the next evolution in consumer payments, with global trials underway and commercial rollouts around the corner. But why should banks, retailers and consumers care?

On-card biometrics – benefits for all

The leading biometric smartcards can authenticate contactless transactions in less than a second, meaning retailers will see revenues increase. More trust in contactless brings faster checkouts and more customer throughput. Less waiting in line means fewer dropouts. Secure payment authentication could also eliminate the need for a payment cap on contactless transactions, meaning higher value purchases could be made securely with contactless. This all results in a better shopping experience for the consumer and higher rates of customer retention and satisfaction for the retailer.

A positive customer experience will also see banks that provide biometric cards position themselves as innovators, while increased card usage will bring financial benefits. Fraud reduction will also drive customer trust in financial services, an important commodity for retention in the age of open banking and PSD2.

Consumers are the real winners. Fraud is never a nice thing to deal with, so there’s an immediate and tangible benefit from increased security. Biometric authentication will also give more consumers the confidence to make contactless transactions, with 38% feeling security is the main barrier to doing so. There’s also no need to remember multiple PIN codes which, combined with the lack of a contingency payment cap, will make consumer transactions more convenient than ever before.

Sounds great – where can I get one?

Customers of the Pleinair Casino in the South of France are using a biometric smartcard by Hong Kong’s MeReal Biometrics. The card not only allows casino players to pay securely but will also be used by employees to gain access and record attendance, a great example of the multi-app capabilities of these cards.

Significantly for the payment space, Visa has announced collaborations with the Bank of Cyprus and Mountain America Credit Union on some of the first market trials of dual-interface biometric payment cards, while travel payment company AirPlus has already seen successful pilots. JCB and IDEMIA also recently announced a partnership to introduce biometric payment cards in Japan and Mastercard has carried out trials in Bulgaria and South Africa.

For any new technology, breaking into key markets is paramount in the journey to widescale commercial use and with companies like Gemalto, IDEMIA, Mastercard and Visa jumping on the biometric bandwagon, the rest of the market will soon follow.

So, what does the future hold for on-card biometrics?

The US and European trials may be the first step towards biometrics becoming the new norm for payment authentication. With contactless adoption slow in the States, biometrics could be the solution needed to quell security concerns. The UK and Canada are markets where trials have yet to be announced, but with the widescale use of contactless for over a decade, biometric innovation would likely take hold quickly.

Global market research indicates that consumers see themselves using contactless payments more than cash or mobile in 3 years’ time and that fingerprints are the preferred ID method to replace the PIN. 2018 is therefore set to be the year of biometric payment cards – watch this space.

About Thomas Rex

Thomas Rex has over 30 years’ experience across the telecoms and mobile industry and joined Fingerprints in 2011. Instrumental in building the company’s successful smartphone business as Head of Sales, Thomas’ current role now sees him responsible for defining the strategic direction of the new smartcard business line.

Before joining Fingerprints, Thomas held various positions at Ericsson, both globally and across Asia.

About Fingerprints

Fingerprint Cards AB (Fingerprints) – the world’s leading biometrics company, with its roots in Sweden. We believe in a secure and seamless universe, where you are the key to everything. Our solutions are found in hundreds of millions of devices and applications, and are used billions of times every day, providing safe and convenient identification and authentication with a human touch.