Pandemic, security and convenience: The rise of biometrics in means of payments
9 minutes reading
Using fingerprints or face recognition for unlocking a phone screen is an action that is 100% integrated with our routine. However, today we can safely say that biometrics presence in our daily lives goes beyond that—in terms of use as well as technological advances related to that type of resource. Biometrics in means of payment, for instance, is already a reality.
In the past few years, after being impacted by a variety of factors, biometrics has rapidly developed and consolidated as one of the most secure methods for identifying people while ensuring data protection. That’s why nowadays it is already applied to different contexts, such as ATMs, employee time clock and computing systems and access control for buildings, airports and other locations, etc.
Furthermore, mainly due to the security and the convenience it represents, the use of biometrics in means of payment has shown a very significant growth. According to a study by Juniper Research, this type of technology will protect more than $3 trillion in mobile payments by 2025.
In this article, we’ll explore biometrics in means of payment and its advantages for issuers and users. Check it out!
Advances in the use of biometrics in means of payment
Although it may seem like a recent innovation, and it has rapidly evolved in the past decades, using one’s body as a tool for personal recognition first appeared in the XIX century. That’s right! In 1892, the scientist Francis Galton built the first taxonomic classification system, which was later adopted by various institutions.
As we know, the method has already been used throughout time in different functions, including outside security. However, its important effect has most recently gained momentum in financial services.
The advance and current rise of using biometrics in means of payment is due to different factors, such as:
- Technological developments;
- Extended population access to technology (smartphones, computers, etc.);
- Reduced use of paper money, and growth in digital transactions;
- Need for offering more convenience and better customer experience;
- E-commerce consolidation;
- Increased and more sophisticated fraudulent payment;
- Pandemic, social distancing and its effects in the consumer behavior.
Given its existing relevance, it’s worth commenting on the last bullet point: the Covid-19 pandemic has led to a significant increase in customer interest in the use of biometrics in means of payment. A Mastercard research on digital payments has shown that 53% of people believe that it is the most secure method to make transactions.
Following the same trend, a data collected by ISVWorld has also shown that 59% of consumers would be willing to pay additional fees for biometric payment services in order to avoid physical contact.
Why biometrics in means of payment is in the foreground and has become essential in the industry?
It is definitely not difficult to understand the reasons why the use of biometrics in means of payment has consolidated as a great ally for the financial industry and its consumers. Let’s go through each of those reasons.
Convenience
Biometric features clearly bring convenience to users. That’s because they replace passwords and eliminate the need to create and memorize a number or alphabetic combination, as well as enable contactless sales and long-distance authentications. It all means more convenience for consumers, who value and look for more and more convenient, streamlined processes in their daily lives.
Agility
We live in a fast-paced world and need things to follow the same pace so that they make sense and meet our needs. By enabling, for instance, a continuous and nearly instantaneous process for payment authorization, biometrics in means of payment perfectly meets that requirement, bringing agility to customers as well as organizations.
Security
Faced with an increasing number of attempts to fraudes and the growing sophistication of fraudators, investing in resources that guarantee safer transactions is becoming more crucial every day. The use of biometrics in payment methods meets this requirement, as it offers greater security to customers and institutions, and is therefore also a fundamental tool in more robust prevention systems fraudes in the sector.
Reduction in overhead costs
While also being less secure, convenient and agile, traditional identification methods involve much higher overhead costs. The use of biometrics in means of payment reduces the cost per transaction and other related expenses, such as the ones in password management. Also, by reducing bureaucracy and bringing more speed to transactions, it maximizes internal processes—which can represent significant savings for institutions and companies.
Biometric payment is already a reality
There are currently 4 main sources of biometrics:
- Fingerprints;
- Voice;
- Face;
- Iris.
Therefore, we have different types of functions, such as identification using fingerprints, facial recognition, voice or iris scanner.
Such a wide variety of possibilities enables using biometrics in means of payment for different contexts, mainly as a manner for authenticating operations. Thus, companies have offered this functionality according to their business characteristics and needs.
That is the case for Super Muffato, a supermarket group in Parana, Brazil, which now takes facial biometrics as a payment method. The technology allows customers to go to the supermarket without bringing anything, since they don't need a card nor money to pay for their shopping.
The company implemented the system in order to offer greater security for customers and employees in times of a pandemic. To use the solution, the consumer downloads an application on their smartphone, registers their card and presents the CPF only on the first purchase at one of the establishment's cashiers.
After that, they can make all payments at the store by facial recognition, which means stopping by the terminal so that the machine can work on the identification—and it’s done.
Dock solutions leverage biometrics in means of payment
How can you offer services like this to your customers? Biometrics is present in the solutions Dock as the Orchestration System of Digital Onboarding and Self-checkout Kiosk. Below we explain more details!
Digital Onboarding Orchestration System
Our system is a complete, omnichannel interface for digital onboarding orchestration, which can be leveraged by any industry and meets specific goals in each step of their process for capturing, analyzing and decision-making.
The solution enables workflow customization and direct integration with partner platforms for consulting credit bureaus, artificial intelligence features and fraud prevention mechanisms.
Since it uses the most advanced verification technologies, the solution relies on document authentication and integrated facial biometrics with the top industry databases.
Self-checkout Kiosk
The self-checkout kiosk is a complete hardware, software and service solution for self-checkout in retail. The plug-and-play solution enables complete operation management and offers a variety of services—including authentication by facial biometrics, check for balance, transactions, payment and installment billing, credit requests, payment receipts, and more.
The solution is provided through a flexible business model—purchase, rent or service—and enables an improved customer experience, reduces lines at stores, as well as reduces employee-related costs and produces data for decision-making.
Biometrics in means of payment: Takeaways from this article
- The increased use of biometrics in means of payment is due to several factors, and the pandemic has played a key role in that scenario;
- Studies have shown that consumers are increasingly more attracted by the feature and that the use of biometrics in means of payment is expected to grow significantly in the upcoming years;
- Biometrics in means of payment ensures convenience, agility, cost savings and security.
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