Idex reports new and advancing biometric payment cards partnerships
Idex Biometrics has been selected by South Korean payment card-maker Kona I to provide the Pay platform for recycled PVC and metal cards for bank clients around the world. An initial order has already shipped to Kona I. The deal comes just as ABI Research Analyst Sam Gazeley writes for Spiceworks about the prospects of biometric payment cards to reshape the payment landscape.
Kona I cards are certified by Visa, Mastercard, JCB and American Express, and the company has an annual production capacity of 60 million cards, according to the announcement.
Idex says biometric metal cards are a growth area among challenger and traditional banks, as they prepare to offer them to affluent customers in 2024.
“We are thrilled to bring true innovation to the high-net-worth customers banking segment, combing innovation and security with high performing biometric cards from Kona I,” says Catharina Eklof, Chief Commercial Officer at Idex Biometrics. “By partnering with Kona I, we are enabling banks and issuers with revolutionary card solutions giving the banks an opportunity to bolster brand loyalty, attract new customers and stickiness with existing ones.”
“Our collaboration with Idex Biometrics and the global introduction of biometric cards represent a compelling opportunity as we build out our industry-leading biometric card product line,” comments Chung-il Cho, CEO of Kona I. “This partnership is our response to the growing demand of banks and issuers for differentiated and innovative payments.”
Kona also partnered with Precise Biometrics to integrate the latter’s BioMatch technology into payment cards which received a Letter of Approval (LoA) from Mastercard in 2021.
Meanwhile, an unnamed card manufacturer integrating Idex Pay has been granted an LoA by Mastercard, following on the heels of Idex’ full certification by the global payments giant.
The approval sets the stage for rapid industrialization of biometric payment cards, the company says in a separate announcement.
“Receiving their LoA so shortly after the IDEX Biometrics certification, demonstrates the efficacy and impact of the IDEX Biometrics fast-track industrial production of biometric payment cards, paired with Mastercard’s efficient certification process” says Eklof.
The new normal is big enough for digital wallets and biometric cards
The increases in contactless payment limits introduced during the pandemic are expected to remain in place, Gazeley writes. This trend has run up against the spread of digital wallets for mobile payments and the coincident chip shortage, raising the question of whether issuers should bother attempting to innovate with biometric cards.
Gazeley argues that as banks attempt to meet the Strong Customer Authentication requirement of Payment Services Directive 2 and mitigate rising payment fraud, biometric cards are well placed to play a significant role in issuers’ plans.
The rise of payments on smartphones will also have the downstream effect of familiarizing consumers with biometric payments, and easing enrollment to biometric cards through NFC scanning.
Perhaps most importantly, the average selling price for biometric cards has been a market inhibitor, but Gazeley says they have decreased, and are now more acceptable. Issuers have been seeking profit margins of close to 50 percent, he says, and a drop to 30 percent could result in the same total revenue, while driving prices down through economies of scale and more efficient production. In-house development of cards could also lower prices, compared to purchasing pre-existing third-party products.
Biometric payment cards, because of their stage of development when the above market disruption struck, were particularly vulnerable. For vendors and issuers prepared to ride out short-term turbulence, Gazeley believes an opportunity awaits to make their biometric cards much more common.