Biometric contactless cards making a sprint for the mainstream
Ubiquitous contactless payments have always been a long-term inevitability. All it took to make them a smart short-term investment was for consumers to stop seeing retail keypads less as a convenience and more as a disease factor.
A Group Futurista global online conference (though predominantly represented by Eastern Hemisphere industry presenters) last week looked at how the nascent contactless payment sector will grow in the shadow of COVID-19.
Speakers from private banks, a central bank, Amazon and a biometric-authentication vendor agreed that accelerated deployment and acceptance of contactless infrastructure is one of the only positive developments resulting from the disease.
Ongoing, almost routine, news of consumer data thefts is having a similar impact on retailers.
Speaking at the conference, Ritesh Jain, COO and CTO of London-based global bank HSBC Group, said contactless cards keep all of a customer’s relevant and valuable data on the card. That reduces their liability for theft.
Everything necessary to create a reliable and profitable contactless payment infrastructure was either in place before COVID-19 or well along in development. Systems on a chip; miniaturized higher-definition biometric sensors; faster networks; artificial intelligence; the Internet of Things and edge computing are all trends that have been converging for years now.
Also speaking at the event, Andre Løvestam, CEO of conference co-sponsor Zwipe AG, said consumer momentum is decidedly swinging from the familiar tactile reassurance of cash and toward “cleaner” contactless transactions. Zwipe has been partnering up with other stakeholders, including a recent deal with a Hong Kong-based specialist card manufacturer.
Løvestam cited a study by financial services giant Mastercard Inc. indicating that 46 percent of consumers worldwide responding to a query had made a contactless card their primary choice (or “top of wallet”) for purchases in the first three months of this year.
Seventy-nine percent of consumers worldwide said the safety and cleanliness of the cards have convinced them to bring one out to buy something.
Løvestam said UK consumers have cut their use of bills in half. Pocketing the billfold is getting easier as economies around the globe are easing limits on when someone is required to type a PIN. He said that in more than 40 nations, bigger transactions can be completed with a tap.
Another speaker at the conference, Rui Pimentel, head of unit at Banco de Portugal, the central bank of that nation, said he expects all Eurozone transactions under €50 will be able to be contactless.
Concerns about fraud continue weigh on adoption, according to Løvestam. Fully 51 percent of consumers, he said, worry that contactless systems can invite crime. It is true that card readers can be used easily to make unintentional “taps.”
But biometric cards — those that require a fingerprint scan on a card — make fraud more difficult, as criminals would have to create a synthetic print. But Zwipe and others are working on ways to create print-scanning cards more cheaply.
Today, a contactless dual-interface card typically costs $1.50 to $4.
A card with discrete components (which are sold as a board to financial services firms and sandwiched into their cards), can cost $30 to $45. A more-integrated system-in-package version due out this year might cost $18 to $25, he said. But a card that his company is building in partnership with Idemia is due for pilot tests in the second half of 2020, and could cost less than $10.