Are biometrics just a fun new way to unlock our Iphone or is it a yellow brick road to a cashless society?
Biometrics describes the unique biological measurements of a person that can be digitized and turned into a traceable record. Some of the most common types of use are fingerprint scanners, voice verification, or retina and vein scans.
Biometrics is slowly being incorporated into our everyday lives. It has been incorporated so brilliantly that we almost don’t even notice it. Every fall when the new Iphone is revealed people wait with baited breath to snatch it up and experience all the new techiness they’ve installed. We get to enjoy that techiness with fingerprint recognition in every release since the Iphone 6. Android phones are equipped with facial recognition that allows the phone to identify the face of it’s owner to enable the unlocking of the phone. But we are not just using it to unlock our phones. We are using it to make our payments too. Think about the App store and Itunes purchases. All you have to do is confirm your purchase by allowing them to identify you with the touch of your thumb to the scanner on your phone. What about ApplePay? It’s marketed to the public as a convenience to keep you from having to carry around your credit card and also protect you from thieves scanning your card while it sits quietly in our purse, stealing the information and creating a duplicate, but this is biometrics at work.
Financial institutions and businesses are incorporating biometric authentication to facilitate payments
MasterCard adopted their new MasterCard Identity Check dubbed ‘selfie pay’ which basically allows their consumers to confirm an online payment by showing their face to their smartphone’s camera. They have also included the option of fingerprint authentication instead if you are not comfortable with sending them your mug shot. Selfie pay rolled out all over Europe last year and is supposed to begin being available here in the U.S. early this year. MasterCard believes this will not only make it more convenient for customers but also mitigate the “risk of fraud” for card-not-present purchases. Heck you can even pay for things with your MagicBand wristband at Walt Disney World.
More and more we are moving away from carrying our cash and credit around with us to pay for things. Consumers want their purchases to be quick and hassle free. Biometrics was listed as the number one technology to transform e commerce in a report the “Top 10 disruptive technologies in fintech: 2016”, released by Juniper Research last year. As we continue to see advances in biometric technology you can be sure it won’t be long before biometrics are utilized regularly in the payments world. In fact, it is already being used by some progressive banks abroad. Japan has installed biometric facial recognition capabilities in over 80,000 of their branch ATM machines. And at Barclay’s Bank corporate customers provide finger vein authentication to prove their identity. Students at Lund University in Sweden can enroll into a system where they use a scan of their handprint to purchase items on campus.
India is well on their way to becoming a cashless society. Almost every single one of India’s 1.3 billion citizens have registered their biometric data under the government’s unique identification program. After submitting their personal information along with all ten fingerprints, both iris scans, and a facial photograph they are given a 12 digit number called Aadhaar. Their Aadhaar can then be used as a permanent financial address, all of this free of charge by the way. The governing authority states that their “Aadhaar identity platform is one of the key pillars of the ‘Digital India’, wherein every resident of the country is provided with a unique identity……and is by far the largest biometrics based identification system in the world.”
Authentication through biometrics is much more secure than passwords
One of the biggest threats to identity theft is having your password hacked and giving all of your personal information to the hacker. If they can figure out your passwords they can get access to credit card numbers, bank account information and more. But hackers can’t duplicate you. You are unique, your fingerprint, your face, your iris cannot be duplicated. And because this unique data is stored locally on your device it is considered generally safer than if stored on a server. Consumers like convenience but are still not willing to risk security.
Last year Visa Inc. conducted a study throughout Europe to find out how consumers felt about biometric technology and it’s safety. The study found that 62% of adults would feel secure using biometric technology as an authentication method to confirm their identity when making a payment using their mobile device. The study also revealed that fingerprint recognition was the most preferred biometric authentication method by consumers due to ease of use.
With greater security also comes greater risks
Because biometrics are so unique they also come with their own set of unique security challenges. While the data is more protected by being stored locally in a secure part of the phone it is still at great risk. Biological identifiers are each unique and permanent making them very valuable. The very uniqueness of the data itself makes it very attractive to hackers and where there is a will there’s a way. If a hacker were to get ahold of this data or find a way to bypass the authentication, you could change passwords but you can’t just go out and get a new face, or new fingerprints.
For this reason it’s best to use biometrics along with other identifying factors. This can be things like geolocation technologies, use of an additional authentication method such as a password or the device itself.
Consumer education is paramount for people to understand how biometrics can keep them safe. Let’s face it, there is something kind of creepy about a company being able to access your computer’s camera and look at your face to make sure it’s you.
Whether consumers will adopt biometric payments technology depends greatly on their awareness and understanding of it. Oftentimes a consumer won’t use a feature simply because they don’t understand how to use it. Consumers may be concerned how their personal information might be used by a business and who has access to it. There is also the concern that there is too much “big brother” and people are afraid of being tracked and watched at any given moment. As this new technology advances and is being adopted in the payments industry financial institutions have an obligation to educate their customers on the new technology they have to offer, the general functionality of the products and what kinds security features and steps have been taken to protect them. If you’d like to learn how you can use this technology to create a more secure environment both you and your customers give Bankcard Brokers a call today.