The Next Frontier of Payments Security in 2019

The payments landscape is in constant transition. Learn what’s in store for 2019 when it comes to the latest payment security trends.

Introduction

In order to adequately posit what the future holds for payments security in 2019, it’s important to look at the fintech industry as a whole, including current and future payments trends. According to Statista, fintech’s largest segment is digital payments, which had a total transaction value of $3,403,168M last year. Overall, total transaction value is projected to have an annual growth rate of 13.9% through 2022, equating to a total amount of $5,728,699M in the next three years.

While digital payments are certainly on the rise, a subcategory of digital payments is drawing particular interest from all financial sectors: mobile payments. As fintech companies continue to disrupt banking, payment processing, and traditional payment platforms, how these transactions remain secure will take priority.

Mobile: A Look Ahead

Consumers have more payment options than ever. As convenience and security take precedence, fintech companies, banks, and merchants are all looking for ways to cater to the desires of consumers without sacrificing security. Mobile contactless and remote payments have become focal points in this venture, as more consumers opt to pay via smartphones. In fact, global mobile payment revenue is slated to surpass $1 trillion within the next three years.

Digital wallets like Apple Pay and Google Pay have empowered consumers to pay at anytime and at any place. By linking to bank accounts and payment cards (including gift cards), digital wallets allow consumers to make online and in-app purchases or to purchase items in-store using a smartphone.

In-store mobile contactless payments use digital wallets that have stored credit and debit card information along with contactless-enabled terminals to allow consumers to use smartphones to securely pay for in-store purchases. The consumer simply waves phones in front of the terminal, which securely reads the payment information using Near Field Communication (NFC).

Securing the Path for New Ways to Pay

Given the rapid rise in mobile as the preferred way to pay, security solutions will need to focus in this area in 2019. Mobile contactless payment systems inherently utilize multi-layered security protections. In order to access the application or digital wallet, a consumer must provide a passcode or fingerprint scan (or other biometric authentication). The digital wallet software secures the transaction and encrypts both personal and transaction data, keeping it secure from hackers.

Biometrics Bring Peace of Mind

Biometric authentication is a core component to mobile contactless payments, and it’s also one of the biggest areas of opportunity for mobile payments security. The mobile biometrics market is expected to grow to $49.33 billion by 2022. This includes the following:

  • Mobile biometric components: scanners, fingerprint readers, cameras, software
  • Mobile biometrics authentication types: iris & retina scan, facial recognition, voice recognition, fingerprint

Fingerprint scanning is already the primary use case for biometrics today, and this method is expected to dominate as a single-factor authentication type in the near-term. Currently, most smartphone manufacturers have integrated this technology and it is being tapped by many payments-focused fintechs as part of payments security solutions. It’s convenience and near ubiquity make it an easy frontrunner for biometric payments security.

Emerging Biometric Authentication Opportunities

While fingerprint scanning currently reigns supreme over other biometrics, new methods are emerging that could expand the ways in which consumers authenticate. We explore some rising stars below.

  • Voice Recognition—This modality relies upon unique voice patterning (a voiceprint) to authenticate users. By monitoring unique factors such as cadence, accent, and other features that may indicate the shape and size of the larynx, nasal passages, and vocal tract, systems can identify and authenticate a user.
  • Facial Recognition—This method measures unique facial characteristics, such as ridges between the eyebrows, distances between cheekbones, edges of the mouth, distances between the eyes, and others to identify and authenticate a user.
  • Iris Scanning—This modality scans and measures the unique pattern of the iris (colored portion of the eye) to identify and authenticate a user.
  • Heartbeat—This method measures a person’s unique heartbeat pattern, otherwise known as an electrocardiogram (ECG), to identify and authenticate a user.

Additionally, multimodal biometrics authentication is also the new frontier of payments security. FacePhi unveiled its multimodal biometrics platform at Money20/20 last year, which offers facial recognition, voice, contactless four-finger, and periocular biometry. This technology can authenticate users in 0.2 seconds, making it a highly appealing mode of securing payments.

Conclusion

Above all, fintech companies, banks, and merchants must find a way to merge convenience and security. Frictionless payments are the future, and biometric authentication is a stepping stone to achieve streamlined payments that are also highly secure.

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