The payment industry has evolved tremendously over the decades to provide ease to the customers. From giving cash to swiping cards and now digital payments, the customers have adopted various ways of making payments with ease.
However, one of the primary issues that the payment industry has been struggling with for the longest period is security. The industry has explored numerous measures to provide security in transactions, finance, and money. Banks ask for biographical data, passcodes whilst the users confirm their identity through signatures and PINs before any banking activity. However, due to certain limitations, hackers manage to find ways to defraud these security measures.
As biometric solutions have been introduced in our day-to-day lives, especially through mobile devices, it can be considered the best potential solution to minimize fraud in the payment industry to a great extent. Authentication is unique to the individual; thus, attackers cannot easily replicate or steal it. The increase in the use of biometric software is being witnessed in the past few years as it has made its way to smartphones, consumer devices, and computers. It has been also adopted by various private and government organizations in areas that require security such as airports, military bases, and at entry ports of national borders.
It is clear that the payment industry is also headed towards an extensive adoption of biometric solutions in the research by Juniper that states mobile biometrics will authenticate $2 trillion worth of both in-store and remote mobile payments annually by 2023.
The Importance of Payment Authentication
Credit and debit card frauds have been a concern despite the security measures taken by financial institutions. According to the report by SmartMetric, in 2018, over USD 24.2 billion was lost globally due to payment card fraud.
The current security features of debit, credit, and other payment systems moreover utilize “two-factor authentication” to authenticate the identity of a person making the payment, and their authority to spend that money. Following are the two factors.
Something You Own
In the two-factor authentication (TFA), something you own can be your credit cards, debit cards, smartphones, or any payment device. In debit and credit cards, the card number, security information encoded on the magnetic strip or EMV chip in the card, and the security code normally printed on the back of the card add layers of security, thus authenticating the owner.
Whilst in smartphones, and payment devices the “something you own” is implanted in Near-field communication (NFC) in the device.
Something You Know
The “something you know” in two-factor authentication (TFA) is the personal identification number (PIN) linked with a chip card or an individual’s signature for magnetic strip cards. And, for smartphones, one must swipe a particular pattern or enter a password to make a payment.
However, TFA has certain limitations in providing complete security while making payments:
- Cloning of cards using skimmers
- Theft of debit and credit cards
- Passwords getting hacked
Role of Biometric Authentication in Making Payments
As the solution utilizes uniquely identifying personal features like fingerprints, voice, face, or eyes for authentication of an individual, it can boost the confidence throughout the payments industry. Biometric software adds an extra layer of security to the TFA while making payments called ‘something you are’. Biometric based payment solutions mostly use fingerprint recognition, facial identification solution, iris recognition solution, and voice recognition.
Advantages of Using Biometrics in Payments
The most obvious benefit that biometric solutions provide in making payments is that the user no more has to remember multiple PINs and passwords. Further on, it provides exceptional security as it utilizes a unique and personal way of identifying individuals.
Another benefit that it offers is speed as authentication using a biometric identifier is quicker and easier than entering a pin or password. This is a benefit for both the consumers as well as businesses. Finally, as the number of retail stores adapting a contactless payment model is ever increasing, especially since the COVID-19 pandemic, the consumers prefer to pay through digital payment applications on their mobile devices, using biometrics. This allows them to make payments from anywhere and at any time.
Get Top-Notch Security with Biometric Solutions
With a surge in contactless payments, the year 2020 is witnessing a faster acceptance of biometric technology as a mode of making payments. A complete shift to such payments will be inevitable as the drive to curb fraud is strong in the payments industry. The technology is constantly developing in terms of speed and accuracy thus, breaking any possible barriers for the consumers. The Smart Biometrics solution facilitates enterprises, governments, and API partners to record and manage customer or visitor data. It decreases any identification issues where the resources can be taken, stolen, borrowed, or even forgotten.