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The unique smart card market challenge and opportunity

The unique smart card market challenge and opportunity

While biometric authentication is becoming a normal part of people’s lives in the form of embedded modules and mobile devices, another mass market biometrics opportunity is currently knocking. NEXT Biometrics is pursuing the smart card market with a flexible fingerprint sensor it, along with manufacturing partner Innolux, has figured out how to mass produce inexpensively.

The marketability of this kind of sensor at the current price point is shown by NEXT’s recent announcement that it has received an order for 650,000 units. The first cards will be ready in the third quarter of this year, and the new flexible sensors are slated for delivery in 2017.

Delivering those new cards will be the result of a long scientific and industrial project, matching a set of challenges unique to smart cards with technological innovation. The sensors supplied by NEXT must meet radically different expectations than those embedded in smart phones.

In smart phones, the standard fingerprint sensor is small, in order to fit conveniently in a neat looking package, while keeping cost low. A smart phone user always has recourse to a password, and access to a device does not provide direct access to a bank account, so the tolerance for false rejections and acceptances is higher, too.

“The smart phone players and the end users are focussed on convenience,” NEXT Biometrics CEO Tore Etholm-Idsøe told Biometric Update. “It’s an add-on functionality in the smart phone. That’s why we see really small sensors in smart phones, because the consequence of malfunctioning for a large percentage of the population with problem fingers (worn, cut, wet or dry fingers) . . . is nothing really. In the smart card, the sensor needs to have uncompromised security, it has to have uncompromised convenience, and it needs to work for close to 100 percent of the population. And that is something dramatically different than a smart phone context.”

A number of ISO standards apply to smart cards, including a newly minted standard for high security authentication, stipulating a sensor size of at least 169 square millimetres. This standard is backed by the findings of a 2015 report from the University Carlos III of Madrid sponsored by NEXT. The “Madrid Report” included blind tests of sensors from three different suppliers, and showed that size is the single greatest factor in accuracy, with sensors of 100 square millimeters returning false rejections more than five times as often as those 200 square millimeters.

The edge provided by NEXT’s unique technology, therefore, is not so much in the level of security and accuracy. “If it’s the same size, there’s not a whole lot difference in the performance,” said Etholm-Idsøe. The difference is that NEXT’s 200 square millimetre sensor will not break when inserted in a smart card, because of its flexibility, and that flexibility comes with minimal extra cost.

The size is what Etholm-Idsøe points to when asked what differentiates NEXT’s offering from that of IDEX, one of few other companies attempting to address the smart card market. IDEX is expecting to begin shipping smart cards with a flexible sensor under 100 square millimeters later this year.

The simple pixel design used by NEXT allows sensors of the necessary size to be fabricated on flexible substrates. “That design is what opens the door for us to manufacture in high-end display fabs using the so called ‘low-temperature’ polysilicon technology. So the same fabs that manufacturer high end displays for the smart phones and iPads and so on, we manufacturer our sensors there. We don’t have to go to the silicon foundries and manufacture our sensors in costly wafers. We can go to high-quality existing players like Innolux.”

Once Sharp is aligned with Innolux, it will be one of only five companies in the world capable of the manufacturing process, Etholm-Idsøe says, along with Samsung, LG, Japan Display, and AUO. Even at that, it will take months for Innolux to install the tools necessary to produce the flexible sensors, with planned production ramping up to 2 million units per month in the first half of 2017.

As the production capability increases and NEXT introduces a significantly expanded ASIC it is developing, the production price will continue to fall towards the point of returning value even in the world’s safest consumer markets. For now, governmental applications and financial institutions in developing markets represent the cutting edge.

“A lot of people when we start talking about sensors and cards, start immediately to think of their own Visa or Mastercard. That’s fine but the value proposition of a sensor in a Visa or Mastercard in the Western world is not necessarily the highest. You will find a much high value proposition, much faster moving markets in other parts of the world where the crime rate is very high.”

In markets like Brazil, most of Africa, and some of Asia-Pacific, the competitor is cash, according to Etholm-Idsøe. That makes institutions in those markets eager to pay for biometric authentication in 2017 and 2018, while the volumes are ramping up, and the prices are creeping down.

The potential of these markets is not strictly to be test cases or early adopters, either. “We have been very pleasantly surprised over the last year or so to see how many of these niches that we can approach for 2017-2018 sales are not even ‘niches;’ they’re big!”

Payment cards in western markets could follow in 2019, but fingerprint sensors could be a common part of government ID cards, transport and corporate access cards, and developing world payments in the very near future.

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