Discover Financial Services has begun testing a mobile payment system using biometric technology at its Riverwoods, Ill., headquarters.
The test has been nearly a year in the making since Discover first announced it would work with Natural Security to deploy the company's hands-free biometric system for the card brand's employees.
"Biometric payments are a quick, efficient and secure way to transact and can offer users an effortless purchasing experience," says Troy Bernard, head of advanced payments at Discover.
Discover will consider a biometrics payments system based on its findings from the Natural Security testing, says Bernard, who did not indicate a timeframe for making that decision.
Natural Security expects feedback from Discover by the end of January, says Dominique Pierre, Natural Security's business development manager for North America. "The good news is that we have had no negative indications from consumers or merchants in any of our previous tests," Pierre says.
Natural Security's system features a mid-range Bluetooth phone sleeve containing payment card and biometric data. The sleeve is used in combination with a fingerprint reader at the point of sale.
Because the U.S. is undergoing a lengthy transition to EMV-chip cards and Near Field Communication payments, it is not likely Discover would incorporate a biometrics system within the next two years, Pierre says.
"I would say that their goal might be three to five years, taking a longer-term view of biometrics and how it would fit in with Discover," Pierre says.
Regardless of what Discover decides short- or long-term, its dealings with Lille, France-based Natural Security SAS will have a different look and feel in the coming year.
Natural Security shifted from a for-profit biometrics software developer to an open non-profit alliance "dedicated to secure transactions based on wireless and biometrics."
"It's a big change for us," Pierre says. "It's the next phase in speeding up secure transactions through biometrics."
The alliance had its official launch in early November and has since attracted 30 members, Pierre adds.
Natural Security established its standard for authentication in response to requirements from banks, retailers and manufacturers, Pierre says. "The focus of the alliance now can be to make the technology available to all banks and retailers," he adds.
Its members include MasterCard Inc., Ingenico SA, Oberthur Technologies, Credit Agricole, BNP Paribas and Swiss Capital International Group.
The Natural Security Alliance is open to all entities with an interest in strong authentication, such as banks, card schemes, retailers, manufacturers, testing and certification bodies, according to the alliance website.
"We want to help move the certification and testing process along, much in the same manner as EMVco or FIDO Alliance," Pierre says.
Discover announced its participation in the Fast Identity Online Alliance, or FIDO, on Dec. 17. MasterCard, Google, PayPal and Microsoft are also FIDO members.
The payments industry will take note of the Natural Security Alliance's technology, says Julie Conroy, senior analyst and fraud expert with Boston-based Aite Group.
"Natural Security has established a standard for secure, efficient payments relying on a combination of biometric authentication and a personal device, typically either a smart card or smart phone," Conroy says.
The biometric data is enrolled in the secure element of the phone or smart card, Conroy says, with wireless communication for authorization at a payment terminal.
In her research, Conroy says she found Natural Security's tests accomplish the main goals of decreasing the consumer's wait in line by completing transactions in 20 seconds. By comparison, chip and PIN transactions generally take about 45 seconds, she says.
There have been other attempts to bring biometrics to the point of sale, Conroy says. Pay By Touch, a relic of the early 2000s, had some initial success but ultimately ended in bankruptcy, Conroy adds.
Natural Security most likely will learn from the past failures of others, Conroy says. For example, Pay By Touch left the enrollment process in the hands of merchants, and "Natural Security's model addresses this challenge by having banks responsible for enrollment," she adds.
The creation of the alliance also facilitates Natural Security's original mission of launching a global biometric system.