San Diego-based Mitek, makers of smartphone camera technology banks use widely for mobile deposit, bets that selfies will soon play a bigger role in payment security, and it's encouraged by a new study detailing how much Millennials love taking photos of themselves.
Adding to technology Mitek acquired last year from Dutch identity verification company IDchecker, Mitek's Mobile Verify product uses selfies to instantly verify a user’s identity and identification documents through various factors enabling secure payments and other transactions in diverse settings.
A growing number of financial services players and payment networks are looking to selfies to replace the type of in-person, third-party verification required for many types of transactions—including some types of cross-border payments—which add to the cost and hassles of sending remittances.
One immediate compelling factor Mitek sees driving demand for Mobile Verify is the emergence of tougher anti-money laundering regulations. The European Commission in July 2016 finalized new rules requiring additional identity verification steps for certain payments, including some cross-border, virtual currency and prepaid card transactions, said Kalle Marsal, Mitek’s chief marketing officer. The first phase of Europe’s new rules go into effect next year.
“Payments security requirements are tightening globally, and we believe we can help banks, payments processors and other financial services players answer those needs with the improvements in smartphone identity technology, Marsal said.
Mitek’s Mobile Verify solution uses smartphone images with a “liveness” detection to verify a user’s actual identity. “Our service can quickly prove this is a real person, not a photo of photo, and it’s who they say they are,” Marsal said.
The technology also can use smartphone photos to verify identity documents often required for executing payments, like driver’s licenses, by reading encoded information, detecting minute inconsistencies in the document’s typefaces and fonts, and running automated algorithms. “The majority of fraudsters are quite sloppy, but they’ve gotten away with it because there are a lot of security holes we’re now closing with advanced smartphone image security,” he said.
The fastest-growing group of consumers—millennials—are prime targets for the service in North America and Europe, Marsal said, because of their fondness for taking selfies.
“Almost 30% of millennials take 5 or more selfies a day and 4% take more than 20 per day,” Marsal said, citing the results of a survey of millennials ages 18-34, which Mitek sponsored with 3,000 consumers in the U.S., U.K. and Canada.
Millennials take selfies daily, but the U.S. leads the pack, according to Mitek's survey. In the U.S., 29% of U.S. millennials take five or more selfies a day compared with 17% of Brits and 8% of Canadians.
Mitek says the popularity of selfies among a prime sector of financial services consumers is good news for Mobile Verify’s potential to provide identity verification for routine purchases.
Currently only 4% of Mitek’s survey respondents said they use a mobile phone camera to authorize purchases, but 46% would like to. For routine occasions to verify their identities for financial services, only 6% said they do so but 39% would be willing to. “We see a huge opportunity for providers, whether they’re payment processors or banks, to leverage photo identity more broadly,” Marsal said.
Osterman Research conducted the survey on behalf of Mitek, polling 3,000 smartphone owner millennials in U.S., Canada and U.K. in August 2016.