FX International Payments
By Mike Faden
Biometrics are unique human physical characteristics, such as fingerprints, that can be used for automated authentication.1 Their growing use in payment solutions is driven largely by the fact that biometrics are becoming standard in smartphones, although they can also be incorporated into other devices such as ATMs, payment terminals, and wearables.2 For example, in a 2016 report analyzing the growth of biometrics in payment services, BI Intelligence predicted that 99 percent of smartphones in the U.S. will have fingerprint scanners by 2021.3
Fingerprint recognition is the best-known biometric technique, but a 2016 Juniper Research study listed several other biometric identifiers expected to see increasing use, including facial recognition, voiceprints, iris scans, and echocardiograms.4 The study estimated that these technologies were already available on 190 million mobile devices in 2016, including smartphones and wearables, and that the number will grow to 600 million devices by 2021. The growing adoption of biometrics is facilitated by the fact that some of the technologies take advantage of existing smartphone capabilities such as cameras and microphones.
Though biometrics were originally used for basic functions such as unlocking smartphones, their use has expanded to include authentication of B2B and consumer payments initiated using payment solutions available from smartphone suppliers, banks and other companies.5 Some companies now enable users to make payments using voice commands as well as fingerprint recognition, for example.6
In a 2017 report, Biometrics Research Group said that it expects that the widespread integration of biometric technology into smartphones will accelerate adoption of mobile payments solutions and mobile banking. “We believe biometrics will speed mobile commerce, especially in North America, because the technology can offer a higher level of security, while providing an intuitive customer experience,” the research firm said in its report.7
Experts say biometrics offer two key benefits, for payment services and for broader applications: they free users from having to remember and enter multiple passwords, and they can improve security because they are not easily stolen or duplicated. As per Stuart Johnston, a partner at global accounting and advisory firm Deloitte, “By 2020, Deloitte forecasts that users may have as many as 200 online accounts, each requiring secure controls over access. Biometrics and our smartphone can provide a simple, convenient and quick single tap solution to this challenge.”8
When it comes to security, however, biometrics introduce concerns as well as potential benefits. As Woodrow Hartzog, an Associate Professor of Law at Samford University, told Wired magazine: “Biometrics are tricky. They can be great because they are really secure. It’s hard to fake someone’s ear, eye, gait, or other things that make an individual uniquely identifiable. But if a biometric is compromised, you’re done. You can’t get another ear.”9
Because of this concern, secure storage of biometric data is extremely important, experts say. That’s one reason why many solutions store biometrics on users’ devices rather than on central corporate systems, according to the Biometrics Research Group report. This approach eliminates the need to transmit biometrics over a network in order to compare them with a remotely held record for verification. Instead, a user’s fingerprint or voice is compared with securely stored biometric data on the device, and only an affirmation is transmitted to the payment service. Because device-based biometric authentication does not require central storage of biometric data, it can’t lead to a large-scale breach where many biometrics are compromised at once, according to the report.
If biometrics are not easy to use or don’t work consistently, people may not use them, the Juniper Research report notes. For example, a fingerprint scanner may not work when the user has just applied sun cream or moisturizer. And in some cases, biometrics methods such as iris recognition require additional steps that make them less likely to be used, the report adds.
Biometrics are increasingly being supported by payment services, in part because of the growing prevalence of biometrics technologies on mobile devices. The increased ease of use and security may speed adoption of mobile commerce and payments, according to Biometrics Research Group. Though fingerprint recognition is the most common biometrics technology today, experts expect a variety of others to become more widespread over time, including face, eye and voice recognition.
Mike Faden has covered business and technology issues for more than 30 years as a writer, consultant and analyst for media brands, market-research firms, startups and established corporations. Mike also is a principal at Content Marketing Partners.
1. “Biometrics”, Department of Homeland Security; https://www.dhs.gov/biometrics
2. “Consumer Biometrics – Skin Deep, or Heartfelt?”, Juniper Research; https://www.juniperresearch.com/document-library/white-papers/consumer-biometrics-~-skin-deep-or-heartfelt
3. Biometrics in the Payments Industry: Why biologically based authentication is becoming the go-to security feature for enabling digital commerce, Business Insider; http://www.businessinsider.com/the-biometrics-report-2016-7
4. Voice and facial recognition to be used in over 600 million mobile devices by 2021, Juniper Research; https://www.juniperresearch.com/press/press-releases/voice-and-facial-recognition-to-be-used-in-over-60
5. “Touch ID”, Wikipedia; ; https://en.wikipedia.org/wiki/Touch_ID
6. “RBC first Canadian bank to launch Interac e-Transfer® using Siri”, Royal Bank of Canada; http://www.rbc.com/newsroom/news/2017/20170307-siri.html
7. Mobile Biometric Applications, Biometrics Research Group; http://www.biometricupdate.com/wp-content/uploads/2017/03/special-report-mobile-biometric-applications.pdf
8. “One in three Australians now using biometric smartphone security”, Deloitte; https://www2.deloitte.com/au/en/pages/media-releases/articles/australian-mobile-consumer-survey-101116.html
9. “Biometrics Are Coming, Along With Serious Security Concerns”, Wired; https://www.wired.com/2016/03/biometrics-coming-along-serious-security-concerns/