2.5M biometric payment cards in 2021 could be first step for future ‘de facto payment type’

ABI Research sees ‘mouth-watering target market’

Dec 17, 2020 | Chris Burt

2.5M biometric payment cards in 2021 could be first step for future ‘de facto payment type’

There could be 2.5 million biometric payment cards issued in 2021, ABI Research forecasts, in the first step towards becoming “the de facto payment type of the future” in the longer run.

The market advisory firm suggests that the efforts of various actors in the ecosystem have improved yield, simplified manufacturing, and crucially, reduced costs.

“It’s taken time for the biometric payment card market to take shape because it is the most complex card form-factor ever developed,” explains ABI Research Digital Security Research Director Phil Sealy. “First-generation biometric payment card solutions can command an Average Selling Price (ASP) anywhere between US$20 and $30, significantly higher than today’s $1 to $2 mark for a contact or contactless payment card. Cost is one of the most significant inhibiting factors keeping the biometric payment card form-factor firmly within the piloting and evaluation phase.”

Depending on volumes, per-unit card costs are expected to be between $13 and $20 in 2021, according to the company’s new ‘Biometric Payment Cards’ report.

The problems associated with discrete components are being solved through either a system-on-package approach, in which some components are integrated into an ASIC to reduce the number of components necessary, or through a single silicon approach. The latter involves an inlay with a single chip and a sensor.

Many planned projects were deferred by six-to-nine months due to the pandemic, ABI says, and market turbulence has made issuers more conservative with innovation spending, but the overall acceleration of contactless digital payments and higher contactless payment amount limits make for “a mouth-watering target market,” Sealy says.

“These higher contactless transaction limits are here to stay and could be considered a significant signal of intent that contactless will ultimately become the de facto digital payment type of the future. This lends itself extremely well to innovative card form-factors, such as the biometric payment card, designed to bring Strong Consumer Authentication (SCA) to address the growing presence of Card Present (CP) contactless fraud, but also privacy, thanks to a biometric match-on-card authentication method,” Sealy concludes.

“The multiple consumer benefits – convenience, security and most importantly hygiene – are irresistible as costs come down with innovation and increasing volumes,” Zwipe CEO André Løvestam Tweeted in agreement. “My belief is that #biometrics will become as ubiquitous in cards as in mobile phones,” adding the “#Nxtgencontactless” hashtag.

ABI mentions Fingerprint Cards, G+D, Idemia, Idex Biometrics, Infineon, Linxens, NXP, STM and Thales among active vendors in the space.

Prior to the pandemic, Goode Intelligence forecast nearly 579 million payment cards would be in use by 2023.