Digital payment through biometric identification for a cash-free world
This is a guest post by Deepak Gupta, CTO and Co-founder of LoginRadius.
Verifying a person’s identity using their biometric data, such as voice, face, or fingerprint, is something that companies around the world are adopting to offer enhanced security to the customers. Biometric payment cards also provide an alternative to traditional chip and PIN cards, and are designed to meet the needs of more tech-savvy customers, who do not have to remember the complex PINs anymore.
Besides, there are thousands of cyberattacks every year, necessitating the need for more secure modes of payment such as biometric identification.
– Per FBI data compiled in a Cloudmark Security Threat Report, wire fraud attacks have risen to an average of $104 million/per month.
– 43 percent of cyber-attacks target small businesses and that 60 percent of those targeted shut shop in the next six months.
What do the latest studies say about biometrics going mainstream for payments
Biometric identification, which safeguards your digital identity and offers convenience, seems to be going mainstream for making payments. The studies on the matter attest to that fact.
– According to Juniper, mobile phones’ biometric authentication usage will increase exponentially in the coming years. By 2023, mobile phones are set to authenticate around 2 trillion USD in remote and in-store payments, a considerable increase from 124 billion USD in 2018.
– Also, most of this growth is set to arise from biometrics-based mobile commerce, which will amount to 57 percent of all biometric transactions in 2023, a significant rise from 28 percent in 2018.
– According to IBM, 67 percent of consumers are fine with using biometric identification, while 87 percent reported they will be comfortable with the technology in the future.
Based on the resultant trend of increasing investment into biometric authentication from major companies, it is safe to say that the future is cash-free.
Five security threats related to payment systems
Payments systems of our time have several vulnerabilities that make them susceptible to various cybersecurity threats. They are as follows:
Over-trusting Encryption: While the Payment Card Industry compliance does not allow encryption to steal data, it is still not safe to depend only on encryption. This is because encryption is only as secure as the type you use and how the keys are managed.
Mobile and BYOD: Mobile device usage is high among professionals at the workplace, but the company issues not all of them with proper security. Employees who are frustrated with the multiple authorization requests, and are using non-compliant and jail-broken devices are at risk of getting hacked.
Malware: Malware is becoming increasingly sophisticated, with hackers being able to track keystrokes, learn passwords, scrape URLs, and infiltrate webcams as well.
IoT Attacks: As the total number of IoT connected devices is projected to amount to 75.44 billion globally by 2025, hackers are likely to target devices such as cars and refrigerators that might not be secured adequately.
Spear Phishing: This form of phishing is hard to identify and is generally aimed at high-ranking officials in companies. Targeted messaging to lure unsuspecting victims has contributed to the necessity for sophisticated security systems.
How biometrics is driving security in digital payments
To make hacking into customer accounts nearly impossible, companies have started employing Multi-factor authentication or MFA—an additional layer of security to safeguard data, incorporating biometric identification methods along with the user’s PIN.
Safe and simple online banking
Top banks around the world have started using technology such as Apple’s Face ID to provide safe and simple online banking services to their clients.
Future of card payments
Big players like MasterCard and Visa have already begun work on technology such as biometric payment cards that allow the user to make purchases with just a scan of their fingerprint on the card’ s sensor.
Driving financial inclusion
Contactless cards that use biometric identification are bringing welcome improvements in welfare and financial inclusion, allowing the effective targeting and distribution of government welfare payments.
Role of enrollment
Since identity is central to an effective biometric payment card strategy, accurate and safe enrollment through means such as smartphone apps or physical attendance is essential.
Leveraging biometrics to combat e-payment threats has been a game-changer, ensuring that the clients get secure and robust financial services without using cash.
Consumers are ready to use biometrics security for their payments, and regulators are pushing for the implementation of the technology as a means to replace older, less secure means of payment such as credit cards.
About the author
DISCLAIMER: Biometric Update’s Industry Insights are submitted content. The views expressed in this post are that of the author, and don’t necessarily reflect the views of Biometric Update.