In Nets’ tech lab, the biggest surprises come from consumers
In the four years since Nets set up a laboratory at its Copenhagen headquarters to test new approaches to payments, it’s learned that consumer response to biometric payments technology is nearly impossible to predict.
Nets presumed consumers were most interested in the ease of use and accuracy of its finger-vein checkout technology, but consumers at the cafeteria where the test was conducted were more concerned with germs.
“We gave people all kinds of information about security, but the top question was about hygiene, and whether it was safe to put your finger into this vein-reading device other people were also touching,” said Jesper Kildegaard Poulsen, head of Nets’ Creation Lab.
In fact, placing a finger on a small screen that instantly reads a person’s unique vein pattern presents the same risk as tapping any other interactive public computer screen like an ATM, payment device or a self-service kiosk, Poulsen said.
“Most people don’t hesitate to tap a payment screen with their bare finger, and the finger-vein reader is exactly the same, but in the cafeteria people looked at these actions differently,” he said.When consumers were reminded it was no different than the way they usually tapped on a payment device to check out, their hesitation disappeared and they quickly adapted to using the finger-vein reader like they routinely tap payment and ATM screens.
More than 22,000 transactions using finger-vein readers at the Copenhagen Business School have been conducted since the test began in April 2018, and hygiene has long since ceased to be a concern for enrolled users.
Another surprise cropped up when Nets launched its latest test of facial recognition for payments this month at a Copenhagen business park that serves 1,000 employees.
Consumers had strikingly different reactions to the security risks of facial recognition for payments. “There has generally been a sharp split between people who balked at sharing their facial data because they’re worried about how it could be misused, and the rest who think it’s brilliant and want to sign up as quickly as possible,” Poulsen said.
At the business park’s cafeteria, consumers may opt to sign up for facial recognition to authenticate payments by linking their face with their employee ID card through a webcam.
Once Nets technicians explained the process, reluctant consumers who tried it quickly adapted to the speed and convenience of facial recognition and lost interest in security issues.
“The biggest challenge always is getting consumers over the hurdle of trying something new—whether it’s a new payments approach or downloading an app—and they’re really not concerned about the new technology and how it works,” Poulsen said.
Nets uses payment technologies developed outside its lab, and so far the outcomes of its tests are for internal use, not to market new payments approaches to third parties, according to Poulsen.
“We’re doing research primarily on behalf of our merchant customers, and the more we experiment with off-the-shelf technologies, the more informed we are about what to invest in and what to plan for,” he said.
Nets’ goal with its payments lab is to create core systems that can easily be adapted for different biometric approaches as they evolve.
“We’re agnostic about which patented payment technologies we’re using, but we want to make sure our engine is versatile enough to support the newest and best approaches so we’re not locked into any single biometics method,” Poulsen said.
It took about two years of experimentation with different facial recognition technology to reach the point where Nets was ready to test one.
Facial recognition is one of the newest biometrics payments technologies—and it’s gaining popularity with the growing use of the technology for unlocking mobile phones—but it’s not likely to be the final approach that wins out over other biometrics technology, Poulsen said.
“I think we’re ultimately going to see a variety of biometrics approaches used for payments, in various combinations,” he said.
Facial recognition works in many environments, and can be set up nearly anywhere, whereas finger-vein technology is preferable for many use cases but it requires an in-person enrollment through a device.
“The security around finger-vein payments is more robust than facial recognition at the moment, because images need to have a high degree of liveliness to ensure authenticity. But facial recognition is easier for a lot of payments scenarios,” he said.
Nets, which sold its corporate payments business to Mastercard last year, still solely owns its merchant-facing core payments processing business. Nets also merged with Germany-based Concardis, significantly expanding its merchant base, for which it’s developing biometric payment solutions.
“We see big opportunities with biometric payments, particularly in self-service retail environments, and merchants are very interested in where this could go, so we’re continuing to do a lot of testing with an eye to co-creating finger-vein and facial recognition payments with merchants in the future,” Poulsen said.