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Will consumer data protection worries boost biometric payment cards?

Will consumer data protection worries boost biometric payment cards?
 

More than 4 out of 10 consumers feel unable to protect their personal data, according to research by Cisco that shows increasing concern is driving people to take action. Forty-four percent say they have already switched away from a company or service provider in response to its data privacy policies or practices.

The company’s 2022 consumer privacy survey indicates some regional variance, but across the world a growing number of consumers are taking actions. Those vary from exercising Data Subject Access Rights to turning off listening devices in their homes.

Data localization, however, does not seem that important to many consumers, and may not be worth its cost.

One of the areas of the widest regional difference is in awareness of national data privacy laws. The most people are aware of the law in India (71 percent), while just over half of those in China, the UK and France say they are aware of the law, compared to just 21 percent in Australia and 28 percent in Spain.

Just under half of those surveyed say that artificial intelligence can improve their lives, while over half are concerned about business uses of AI.

Meanwhile, household consumer brand names like Walmart, Peloton and Snap are adopting technologies that could allow them to gather biometric data from their customers, writes Retail Dive. They are attempting to thread the needle of using biometric data without violating laws or alienating customers by processing or sharing biometrics unnecessarily.

Payments, however, are one area where data protection concerns could drive interest in more biometrics use.

Biometric payments may be an exception

When it comes to biometric payment cards, Fingerprint Cards President and Head of Payment and Access Michel Roig writes in a market analysis piece that current trends are aligning with internal company research showing consumers are ready to use biometrics to secure payments.

Payments with contactless payment cards reached half of in-store transactions globally in 2021, but consumers remain worried about fraud. Roig sees growth ahead for biometric cards in retail, but also in fintech and decentralized finance applications to mitigate those concerns.

Data from Payments Canada, meanwhile, shows that credit card transactions rose in volume by 6 percent from 2020 to 2021, and in value by 5 percent. Debit card transactions increased by 5 and 8 percent in volume and value, respectively. Mobile payments grew in both measures by 13 percent

“In 2021, many payment trends remained consistent including the continued demise of paper payments and the acceleration in digital payments, which now represent 86 percent of all transactions,” says Jon Purther, director of Market Insights, Payments Canada. “Canadians’ preference for contactless and mobile payments continues, and we are seeing increasing use and interest in more diverse payment preferences such as biometrics, wearables, QR codes, ‘buy now, pay later’, and digital currencies.”

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