Mastercard plots post-cards payments plan for Asia as biometrics grow in popularity

A Mastercard executive believes physical payment cards are heading the way of the dodo. Developments in biometrics and digital identity across Asia indicate this belief is well founded.

The company has been moving steadily towards tokenization and biometric authentication for payments, especially made online.

The payment giant’s approach in Asia is a little different from Europe and Latin America, where so far it is more centered around passkeys, but the same basic shift is playing out around the world.

While biometrics grow, the future of biometric payment cards is up in the air. Analyst firm Goode Intelligence has forecasted more conservative figures for adoption of biometric payment cards. Mastercard has launched luxury biometric metal credit cards in Bangladesh, while palm vein biometrics has seen pick-up from the likes of Mastercard and Amazon.

Despite having “card” in his employer’s name, Gautam Aggarwal, division president for South Asia at Mastercard, was candid about the future. Speaking at TechSparks 2025, YourStory’s startup tech summit, Aggarwal said, “The card is not the form factor anymore.”

“Existing physical form factors that we know of today — be it the mobile device, be it a card, be it a QR code — I don’t think those will exist.”

The change is visible in India, where Mastercard is navigating an intensely dynamic fintech environment. The country’s Unified Payments Interface (UPI) processed nearly 200 billion transactions in FY25, an unrivalled volume. Meanwhile, domestic rival RuPay, backed by the National Payments Corporation of India, is leveraging UPI’s infrastructure to challenge global incumbents.

But Mastercard is not backing down. The payments giant operates UPI-like systems in 10 to 12 other markets and is expanding into loyalty programs, cybersecurity, and behavioral biometrics. Fraud detection has evolved into real-time AI systems that analyze hundreds of micro-behaviors, such as how a user holds their phone to the cadence of their typing.

Mastercard has acquired eight cybersecurity firms in the past five years to bolster these capabilities. Banks using its AI suite now see approval rates as high as 99.5 percent, even as fraud attempts rise. But Mastercard’s ambitions go beyond security.

The company is investing in “agentic commerce AI” technology that enables transactions to happen without any conscious user interaction. This could be where RFID tags and AI systems detect what customers are carrying and automatically charge as they walk out of the store.

There is great potential yet in India’s market. While mature digital economies process two to six times their GDP in payments, India’s $4.4-trillion economy sees just $3.5 trillion in digital transactions. “Mastercard’s focus today is not about competing in existing spaces,” Aggarwal said. “We are continuously looking at use cases that we can go and digitalise.”

Mastercard was an early investor in Indian start-up Razorpay and holds stakes in Pine Labs and Slice. Aggarwal said Mastercard uses around $300 million annually in strategic investments. PayU, a digital financial services provider in India, has Flash Pay, a biometric authentication solution for mobile digital payments, and partnered with Mastercard to introduce passkeys for payments to the Indian market.

South Korea sees growth of face biometric payments

A growing number of young South Koreans are ditching physical wallets and smartphones in favor of biometrics to make payments.

The country has seen growing use of Toss FacePay, a face biometrics-powered payment service. The Korea Times reports on a young office worker named Kim who, despite a lengthy registration process, finds the system convenient, allowing her to pay by showing her face, and very fast. Toss is in the process of expanding the service across the country.

Younger consumers are gravitating toward digital-first solutions like Toss FacePay and Kakao Pay. The trend is accelerating the decline of traditional card usage among people in their 20s. According to the Financial Supervisory Service, total card spending by eight major issuers — including Shinhan, Samsung, Hyundai, and Lotte — reached 441.3 trillion won ($303 billion) in the first half of 2025. Yet spending by consumers aged 29 and under amounted to just 46.9 trillion won ($32 billion), a sharp drop from the previous year’s 98.3 trillion won ($67.5 billion).

While card spending among people in their 20s rose 7.2 percent in 2022, it fell 0.6 percent in 2023 and dipped another 0.3 percent this year, continuing a downward trajectory. This shift is hurting credit card companies’ bottom lines. The combined net profit of six major issuers — Samsung, Shinhan, KB Kookmin, Hyundai, Hana and Woori — fell 16 percent year-on-year to 1.69 trillion won ($1.16 billion) in the first three quarters of 2025. Shinhan Card posted the steepest decline, with profits plunging 31 percent. Hyundai Card was the only outlier, reporting a modest 6.2 percent increase.

Industry insiders attribute the slump to changing payment habits among younger consumers, who are drawn to the speed, ease and novelty of fintech solutions. “The growing variety of alternative payment options, following the expansion of simple and facial recognition payment services, is steadily eroding the position of traditional card companies,” an “industry insider” said, according to The Korea Times.

Toss launched its FacePay service in March and officially rolled it out in September. The pilot phase attracted over 400,000 users, with a reuse rate of 60 percent. The company aims to scale up to 300,000 payment terminals by year-end and one million by the end of 2026, targeting everyday venues like cafes, cinemas and hospitals.

A recent Bank of Korea survey revealed that people in their 20s prioritize convenience when choosing payment methods, unlike older generations who emphasize security.

Cambodia’s digital wallet enjoys rapid uptake

The way Cambodians pay, save and interact with money is changing. Bakong, the country’s central bank-backed digital wallet system, is driving the change. On its official site, it’s described as Cambodia’s “all-in-one mobile payment and banking app.”

According to Sok Chan, Financial Inclusion Head of the Association of Banks in Cambodia (ABC), Bakong has now integrated with 69 financial institutions and serves over 30 million users. The adoption of KHQR, a standardized QR code for payments, has surged to 4.9 million merchant accounts, while e-wallet accounts have reached 22.9 million, as reported by Kiri Post.

The National Bank of Cambodia (NBC) reported that in the first quarter of 2025, US dollar transactions via digital platforms rose by 133 percent, while Cambodian riel transactions jumped 334 percent. This growth is fueled by 25.3 million active mobile connections — 143 percent of the population — and 10.8 million internet users as of early 2025.

With 30 million digital wallets in circulation — 1.7 times the country’s population — and 4.5 million merchants accepting KHQR payments, cashless transactions are now a part of everyday life, echoing the likes of WeChat Pay in China.

ABC’s Chan emphasized that NBC’s modernization efforts have significantly boosted digital wallet adoption, particularly among youth. Initiatives like the upcoming Youth Bakong programme — which will allow minors to register using student IDs — aim to expand access to digital payments even further.

Partnerships between banks and tech firms are boosting the transformation, while the interconnected systems now linking banks and financial institutions are also helping promote the use of Cambodia’s riel. However, the rise of digital payments brings new risks. ABC warned of increasing online fraud and cyber threats. To counter this, the association is working with stakeholders to promote digital literacy through financial education campaigns across urban and rural areas.

Chan urged users to remain vigilant: “To avoid being hacked, users should never share their identification number, birthdate, password, or personal identification number and personal information on social media. Always answer security questions posed by their financial institution for identity verification.”

Article Topics

behavioral biometrics  |  biometric payments  |  biometrics  |  digital payments  |  face biometrics  |  financial services  |  Mastercard  |  payment passkey  |  Toss