With payments security threats ever on the rise and bad actors lurking around every digital corner, many wonder if biometrics is ready to go mainstream in payments.
Biometrics have grown increasingly popular among Americans and Eurpoeans, who have embraced the technology in smartphone and banking technology.Today, a little over one-third (35%) of consumers say they regularly use fingerprint recognition and everyone else has at least heard of it or used it one or two times.
In India, biometrics has been leveraged on an even greater scale, with over 1 billion Indian consumers having established a digital identity with the government. These consumers are able to use a photograph along with iris scan recognition and fingerprinting to collect social welfare payments. To hit registrations at this level took under a decade, allowing the government to relatively quickly acquire tools to uniquely identify every citizen. The ramifications of this go beyond identification, however, and serve as ground zero for financial inclusion and digital payments.
The reality is that biometrics is really starting to gain ground in mainstream payments. Consumers are more comfortable, spurring more organizations, fintechs, and banks to leverage biometric technology as a part of the payment process.
Just how widespread is biometric adoption? Juniper Research Study reports that mobile biometrics will authenticate $2 trillion in remote and in-store payments in 2023 — a massive increase from the $124 authenticated in 2018. Most of this growth is predicted to come from mobile commerce transactions that can be biometrically verified, which should represent more than half (57%) of all biometric transactions by 2023. That’s more than double the 28% of biometrically-verified mobile commerce transactions from 2018.
Smartphones will contribute greatly to this growth as the grand majority (90%) of smartphones currently in circulation can support facial recognition that is software-based and 80% are able to complete voice-authenticated payments. While roughly 5 billion smartphones are projected to be in active use in 2023, more than 1.5 billion of them are forecasted to use software-based biometrics.
Another study reported that well over half (61%) of consumers consider biometrics a faster, more efficient way to pay than other traditional methods and 57% think that biometric payment verification will enable more convenient smartphone shopping experiences than can be had on traditional desktops.
Biometrics are ideal for security as they are foundational to better anti-fraud tools without sacrificing the customer experience. Lower levels of friction along with a growing adoption rate makes it imperative that innovative companies engage with biometric solutions to drive improved security and a better customer experience.
While passwords are not dead, they are a dying breed. Consumers are not happy with the friction caused by passwords or by the ineffectiveness as illustrated by data breach headlines. Instead, consumers are interested in solid security without the interruptions. Biometrics offer visible security without hindering the purchase flow. Consumers are smart and they understand that biometrics are a secure method for payment authorization. That said, the type of biometrics still matters to consumers. While seemingly comfortable with fingerprint recognition, voice recognition actually ranks lower than passwords in consumers’ perspectives.
The opportunities for biometrics and payments are endless. Fingerprint recognition is the most widespread biometric technology in use, though others like voice, facial, and heartbeat pattern recognition are not far behind. Some banks are looking into how fingerprint recognition may be used instead of PINs for contactless card payments. One estimate shows a predicted 579 million biometric payment cards will be in use by 2023. Other research studies report that more than half (54%) of UK consumers are open to using biometric cards made available by their bank.
In other cases, we have seen established financial service providers partnering with fintechs to move biometric authentication from smartphones to cards. On a global level, financial institutions are looking to test deviceless biometric payments, removing the need for a device at all. Instead, consumers pay with “who they are” using fingerprint recognition or other biometric markers to authenticate. For example:
Payments security has made great strides through biometrics. As data breaches still capture headlines and other cases of financial fraud being perpetrated by bad actors, biometric technology is a strong way to secure transactions. It’s not a silver bullet, but it does offer enhanced security as well as improved customer experience.
Continued growth and adoption will require additional investments in garnering consumer trust. This means real demonstrations of the ability for companies to use biometrics to securely collect and handle consumer biometric data. Additionally, the formulation of global standards around the storage, sharing, and usage of biometric data would go a long way in building trust and establishing guidelines for all players involved.