Emerging Payment Authentication Technology – Biometrics
When consumers go to the grocery store or purchase something online, most retailers and businesses now have some form of payment authentication method in place. Whether your own business accepts EMV chip card payments and requires a PIN number to authorize payment or asks security questions unique to that person online or over the phone, there are layers of security in place.
But, what if answering security questions online or over the phone suddenly wasn’t secure enough? Think about the potential ramifications for your customers and your business if fraud had occurred and you weren’t able to detect it.
Securing payments is a big deal — that’s no secret. The importance of payment authentication techniques and technology to support it has increased exponentially. Partly due to the growing volume of payments being made online and consumers being able to pay for products and services dozens of different ways. And also partly because criminals have been adjusting their approach to payment and card fraud as technology has changed.
Consumers can pay for utility bills and other home services via ACH, use their credit or debit card for gas, and then use a service such as PayPal or Google Pay to complete purchases elsewhere (depending on the type of merchant and the amount). Merchants now have to take into account a wider variety of payment methods consumers use and the best way to secure those transactions.
Fraud has been an issue for as long as there’s been commerce. Even though merchants have been able to utilize modern technology to help intelligently combat payment fraud, there are still major risks. According to a report from The Federal Reserve, card-not-present transactions now account for 59% of all fraud even though it makes up just 22% of total purchases.
That shift is a direct result of consumers using multiple payment methods and technologies to pay for bills, make purchases in person and online, and their expectations on what that payment experience should be like for them.
Effectively, consumers want a streamlined and easy payment experience, but also want to avoid all of the risks associated with those wide varieties of payment methods.
Merchants, credit card agencies, and major corporations have all made inroads into advancing new payment security technologies in some capacity over the years. Now that payment security — and payment authentication specifically — is top of mind for businesses and consumers, it’s time we take a look at one type of payment authentication technology that has really gained traction.
Biometric Payment Authentication
Many in the industry view biometrics, specifically fingerprint authentication, as the most effective standalone payment authentication measure available. The biometrics industry itself is expected to be a $30 billion industry by 2021 and 93% of customers have a stated preference for biometric authentication.
This technology is becoming increasingly available to consumers, with many of the smartphones released coming equipped with biometric sensors for fingerprint or iris scanning purposes.
Given the widespread adoption of our mobile economy and how people shop and do business in the 21st century now, biometrics makes the most sense. The majority of people in developed nations have smartphones already and that number is only going to increase across the globe.
And since consumers want that easy and efficient payment experience, biometric authentication solves for that while maintaining necessary security that doesn’t put payments for consumers or merchants in question. Using fingerprint or iris scanners on your smart devices is incredibly seamless, quick, and requires very little effort on the customer’s part. There’s no need to remember any passwords, answer security questions, or anything else that could turn what is otherwise a pleasant payment experience into a tedious and frustrating one.
More importantly. Both merchants and customers are protected when biometric payment authentication methods are used for transactions.
Remember, the central benefits to biometrics as it pertains to payments security and authentication are:
- No need to enter or remember passwords
- Biometrics data is not easily stolen or duplicated
- It provides effective security and transaction efficiencies
- Consumers prefer it over passwords and multi-step security protocols