The payments industry has turned its attention inward, focusing on securing its own technology from fraudsters without driving off their customers.

Many of the issues financial companies face stem from the fast pace at which they are launching services to serve a tech-savvy millennial customer base. "Banks are under pressure to launch new things very fast but then think, 'How do I secure this?'" said Uri Rivner, vice president of business development and cyber security at BioCatch, a fraud detection provider that presented during FinovateFall in New York on Sept. 24. Companies usually launch first then secure, he said, during a separate interview at the show.

But with the year's many high-profile data breaches, the industry is now more aware of its role in making the payments ecosystem more secure.

"Consumers are tired of their security being compromised even by big retail giants due to aging technology like magstripe. Financial institutions are tired of fighting these breaches, which keep arising every day," said Deva Annamalai, a banking technologist in Salt Lake City. "This shows a renewed interest in the field of advanced authentication, biometrics and alternate methods of validating identity."

BioCatch's cognitive biometrics technology looks at a multitude of consumers' behavioral patterns within online and mobile banking to decide whether a user is who they say they are or a fraudster. BioCatch examines the way people move their mouse to click on a login box, whether they usually backspace while typing their password and how they set down their handheld device. The company can also detect how quickly a consumer types different parts of a password. In one example, a user with a 15-character password types the first five characters and the last five characters in about 1.4 seconds, but takes about 3.9 seconds to type the middle five characters.

The company, which launched in 2013, currently works only with banks, but plans to pilot its fraud prevention platform with several e-commerce retailers this year.

"Fraud is no longer the biggest problem," Rivner said. "Friction is the biggest problem because banks are piling on extra security layers on the consumer."

NICE Systems is also working on a way to use biometrics without adding steps for the consumer. It is working with audio-based biometrics to let financial institutions identify customers who connect to their call center without asking them to verify information. NICE uses voice to identify customers within 10 seconds. 

[Correction: An earlier verison of this story incorrectly stated that NICE would release an app next month.]

"Organizations spend a lot of time and money asking authentication questions to combat social engineering and stolen consumer data and this has a negative impact on the customer experience," said Matthew Storm, director of innovation and solutions at NICE, in an email. With biometrics "agents can provide excellent service and the technology is the security mechanism in the background to provide protection."   

Other companies add a few steps to incorporate biometric authentication.

Hoyos Labs scans a user's face and iris to log them into accounts.

EyeLock also uses iris scanning. The company has developed a small device that consumers can use to scan their iris to unlock their computers or individual applications on their computers.

AnchorID, which is also keen to eliminate the username/password process, offers biometrics as a backup. Consumers download the AnchorID mobile app and receive a new username to use on websites that accept AnchorID for login. The consumer then enters the username but leave the password box empty. When the consumer pushes the login button, a message arrives on their smartphone asking whether they are trying to login and the user pushes 'yes' or 'no.' Other forms of authentication can be added, such as voice or iris biometrics.

While many in the payments industry are talking about how Bitcoin technology can enhance security, no cryptocurrency-related startup presented during FinovateFall.

Last year, Bitcoin dominated the discussion in the payments industry, but the hype is subsiding as real businesses start working on protocol-level solutions, said Dave Birch, a payments expert and global ambassador at Consult Hyperion.

There was one cryptocurrency company on the vendor floor, Indacoin, a Bitcoin and Litecoin exchange that connects people willing to buy and sell the digital currencies.

The industry is also seemingly less interested in startup mobile wallets, which look to aggregate all of consumer's payment, loyalty and rewards cards in one place.

"Mobile payments and wallets are not easy things to launch and succeed. Even big players like Google have only seen limited success in this area," said Annamalai. And "when a player like Apple throws its weight around, smaller players have a hard time fighting that wake."

However, WingCash is still developing in this area, building what it describes as more of a digital currency platform than a mobile wallet. Its product is white-labeled for financial institutions and retailers.

The company differentiates itself by allowing cash-like transfers between wallets. These "cash" transfers are free, immediate and guaranteed, which is why merchants are interested in using the platform, said Bradley Wilkes, founder and president of WingCash.

Merchants that use WingCash include many in the company's home state of Utah, including Baskin Robins in Orem and Costa Vida Mexican food chains across many cities.

Wilkes said WingCash provides a better interface than Bitcoin wallets with the same benefits of fast, free transfers. WingCash displays funds in the form of colorful bank notes, whereas Bitcoin wallets usually show only long strings of numbers representing balances and transfers, he said.

Both consumers and merchants have to be WingCash users for the system to work, and this chicken-and-egg problem has been a hurdle for many mobile wallet providers.

WingCash recently partnered with Clip Inc., a payment processor and merchant acquirer, to bring the mobile wallet to consumers in Mexico.

"Payments has always been a complex, expensive, multi-party, engagement-oriented business and many of the smaller mobile wallet players don't have that amount of momentum to impact change in the market place," Annamalai said. "What we are seeing now is the consolidation…in this space where a few strong players will emerge to stay the long haul."

While the big tech companies have started playing in the mobile wallet space, startups are seeing an opportunity to take on traditional payment methods, such as ACH and checks.

VerifyValid launched MagicMony, a mobile app that allows consumers to transfer digital checks for free. The company has focused on business-to-business digital check payments in the past.

"I might even say checks are the best form of payment," said Paul Doyle, founder and CEO of VerifyValid. "It's a fallacy that no one uses checks."

With the company's system, recipients of digital checks don't have to be VerifyValid customers. They can print out the check and take it to a bank or check-cashing store. Becoming a VerifyValid customer adds the option to transfer funds directly into a bank account.

Knox Payments provides ACH transfers for customers and differentiates itself by speeding up that process. Customers log in to their online banking account from the Knox platform, select which account to pay from and verify the details Knox gets from the bank without having to fill them in. 

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