There seems to be little doubt that the global pandemic has led to a surge of interest around biometric payments. With a focus on hygiene and touchless payments, experts believe its popularity is here to stay even after the pandemic ends. As such contactless payment card transactions spiked from $1.7 billion in 2020 to $2.5 billion in 2021, with cards making up 79% of overall contactless transactions, according to Juniper Research, breathing fresh air into the sales of the biometric payment card market. Moreover, UBS analysts project that biometric payments could capture a 15% share of the global card market within the next five years.
In an exclusive conversation with CXOToday, Venkat Sriramagiri, Chief Operating Officer, Worldline India, explains why using biometric authentication for digital payments is far safer than other payment methods and the challenges and innovation in this space.
What according to you is the most exciting innovation for biometric technology at the moment?
Covid-19 has drastically accelerated an assortment of technological changes which have previously been progressing at snail’s pace. There are plenty of used cases amplified by the pandemic which could be solved by quality biometric technology and infrastructure. Whether we are trying to eliminate in-person voting, trading floors, remote working in regulated industries and even verifying students taking exams, all these would have been moon-shot opportunities even a decade ago, but now it doesn’t sound impossible. While not all of them are not as quick and easily solved by biometrics, they’ve showcased its value-add. As with any nascent technology, first things to get disrupted are the low-hanging traditional fruits. In the payments world, the introduction of EMV cards with fingerprint biometric is upgrading bank cards which have been around since the 1980s. As no investment is needed in upgrading POS infrastructure, it makes it easy for the industry to adopt it fast. It also makes card payments secure as no PINs are involved and entire biometric data is stored in the card itself.
What are the biggest drivers of biometric adoption at present?
In 2004, IBM launched the ThinkPad with a fingerprint sensor which was only accessible to a select few who could afford the privacy. Then in 2013, Apple took the world by storm with the TouchID and then again in 2017 with the FaceID. It took over half a decade to reach mass adoption and now nearly every device in the market has some biometric authentication integrated. Drawing the parallel to the financial infrastructure, some parts of the value chain have already been flipped over with biometrics. Companies like Onfido and Veriff have been leading the change with a strategic mix of biometrics and analytics-based fraud prevention. The next phase is the mass-adoption of biometrics into consumer-facing service offerings. Two major factors come into play, firstly, convenience to consumers in using figure print, voice or face for authentication: This eliminates the need of remembering multiple passwords and gives a simple, frictionless experience to consumers. Secondly, it gives the highest level of security and authentication through biometric makes it impossible to share, copy, especially non-consensually.
For example, with the Government of India’s AEPS (Aadhaar Enabled Payment System), all bank accounts are linked to Aadhaar and payments can be done with Biometric authentication. With this ecosystem, all government departments can directly pay to the end user through biometric authentication.
What are the biggest challenges facing the biometrics industry at present?
On the social front, due to the inherent nature of being very personal, people are not very comfortable in using biometrics due to fear of safety. Regulatory Controls also acts as a dampener. Rising distrust among consumers regarding ‘bigtechs companies in their use of consumer data is spilling over into a broader distrust of technology. Due to increased regulations around personal data privacy, storing and usage of the data policies are continuously evolving, biometrics does suffer some setbacks. Also the infrastructure to manage the end-to-end process for biometric usage is still evolving.. This is compounded by the additional learning curve associated with the non-tech savvy population. All these are creating a barrier in biometrics adoption among businesses and end-users.
How do you think biometrics will impact digital identity?
The Estonian government’s digital strategy is often lauded as the poster child for authentication and identification, and the most evident impact is the convergence of a user profile. It is built on the fundamental idea to “prevent civil servants from asking for citizens’ data if it has already been provided to a government body, and on ‘trust by design,’ which puts security and public confidence first”. Digital identity has gone through an interesting transformation:
- Using something you have:the key to one’s vehicle, a document, a card, or a badge.
- Using something you know:a name, a secret, or a password.
- Using something you are:your fingerprint, your hand, your face
With ease of use, biometric is likely to become a prominent standard for digital identity and also the next frontier of digital payments.
What challenges are organizations facing today that you feel biometrics can help to solve? Can it solve the burgeoning fraud problem in the enterprise?
Contactless biometric card dramatically simplifies proximity payments and also provides an essential level of privacy and confidence. Payments get more secure and easier with Biometric adoption. Biometric can help organisations to simplify, standardize and optimize all identity, access management related processes/systems. Be it access cards to employees, access to Laptops/servers, secure access to production systems, Biometric can become a de facto standard in future. Biometric Organisations can leverage biometric authentication fully to minimize fraud/security related issues. Biometric authentication using statistical algorithms may have false positives leading to inaccurate results at times, which must be taken care of before making extreme decisions.
or businesses, what are the inherent risks of implementing biometric solutions?
One misconception is that biometrics is the golden key which fixes everything. I think on a fundamental level, there needs to be a clear product-market-fit. It’s cutting through the hype and assessing if the characteristics of biometrics ameliorate the underlying problem you are trying to solve. One also needs to be fully wary of inherent risks relating to biometric usage like Safety – Biometric is not hidden, it is available all the time for all to see. Unlike Passwords, Biometric is same for all types of access and can’t be changed – Stolen identity may lead to some serious consequences. Fraudsters operate even more with rigor, hence Organisations need to fully assess risks associated with Biometric usage before large scale adoption. However, if organisations plan with adequate risk management, Biometrics is as important as deploying analytics on user data. Machine learning in fraud prevention has seen tremendous improvements in efficiency and paired together, is an incredible opportunity.
How are you expecting to see the industry change or evolve over the next 12 months?
From an implementation perspective, the market will try to get all the low-hanging fruits which benefit from biometrics. EMV cards with biometrics can be implemented without the need for infrastructural change and neo-banks are leveraging phone cameras to verify users against their identity cards.
From a technological progress perspective, there’s a lot going on with decentralization. Blockchain could act as the missing part of the puzzle in helping consumers trust technology with their personal information. Additionally, there also has been a lot of research around behavioral biometrics, which is the use of deep analytics and insights to use a consumer’s behavior as their identity.