Biometrics can solve contactless cards' security/usability dilemma
Biometric smart cards are emerging as the next innovation in payment cards.
On-card biometrics is the final piece of the puzzle to bring trust and security to contactless payments without compromising convenience. Consumers are familiar with biometric authentication from the mobile world and therefore recognize the value it can bring to their cards.
Our consumer research revealed that people around the world want to use their contactless cards more frequently, but security concerns and transaction caps are holding them back. Indeed, 38% of consumers see security as the main barrier to use. On top of this, a market study from Visa shows that one in five (20%) Europeans use the same PIN on more than one payment card, and one in six (16%) share their card details with family and friends. They know that this is a risky behavior, but still do it because convenience always wins.
Importantly, the benefits are many and wide ranging for all stakeholders:
Banks can open up many opportunities to increase the use of payment cards, while reducing fraud and customer frustration. New technology can also enable them to bundle with other innovative services. Being at the cutting edge brings increased status and trust, which in turn can result in new customers.
Retailers will see more through-put in store as more consumers use contactless and spend less time in line. And this often leads to higher spend as there is less time to second-guess purchases. This will be even more noticeable if the contactless payment cap is removed. Overall, swifter and more secure shopping experience, all using the existing dual-interface payment terminals.
Consumers are the real winners here. They were given contactless to make their lives easier and quicker, which it has. A recent infographic from Barclaycard visualizes how much time is actually saved using contactless instead of chip and PIN and cash, and it truly adds up over a lifetime. However, the lack of authentication has left many uneasy. Now, with on-card biometrics, they can retain the speed and convenience of contactless, just with added confidence.
It is exciting that consumers are driving demand for new features and the industry is working hard to answer the call. To make it happen, though, players from the entire ecosystem need to work together.
So, where are we now? The technology is ready to scale with low power consumption and the required biometric performance, and it can be integrated into cards with current manufacturing techniques, working with existing contactless point of sales terminals. Finally, the pull from the market is there.