The Future of Biometric Authentication in Payment Systems

Backtracking a few years, we could never imagine biometric authentication as a thing of today, as we are in it today. We can still evidently remember being in awe the first time our eye scans were used and the rest is history.

Fast forward to today; we do not just have PIN codes and patterns to access devices, we also use fingerprints, facial features, voice recognition, and so on. While there is still a lot to discover about biometric authentication, especially for the payments industry, the feature is all set to redefine security, convenience, accessibility, and the overall customer experience.

Let us walk you through what the future holds for biometric authentication in the payments industry and how business owners can benefit from it.

What is Biometric Authentication?

Biometric characteristics are unique physical or biological aspects of a person. These unique characteristics are recorded and used to identify people transacting via digital mediums.

Just like how people can access a device based on their unique physical characteristics, it is also used as a point-of-sale in the payments industry. Biometric authentication in payments refers to a security step used to verify a payment transaction. It detects and approves the physical characteristics of a user to authenticate or process deductions.

One of the most common mediums used in the payments industry is a fingerprint. Users can go cashless or even cardless, and make a payment using a fingerprint. There are multiple other mediums, such as the retina, signature, voice, face, and so on.

Biometric authentication in payments sits at the intersection of security and convenience. Hence, it is widely opted for and loved. This is why business owners such as you must be aware of its progress and future.

Applications of Biometric Authentication in Payments

Let’s walk through the types of biometric authentications used during a payment. Here are all the possible applications for payment solutions:

Fingerprint Scanning

Fingerprints are unique to individuals and easy to detect and use. Payment providers and users prefer this method over all the others because of its ease and security. So much so that five in six (87%) consumers use or plan to use this medium.

Hence, payment gateways and apps such as Google Pay have widely adopted it to authorize payments. Users can choose to either enter their PIN to gain access to the app or, alternatively, go for a fingerprint.

Facial Recognition

This technology uses the facial features of a person to authenticate a financial transaction. This feature is the second most popular option around the country. One great example is facial recognition-enabled shopping at Carrefour. Shoppers can make payments simply by smiling at the payment counter’s camera.

Alternatively, this technology can be used for online payments as well. Users can check out their purchase using facial recognition via their mobile phone’s camera. Security comes along with convenience because facial features are indeed another unique human trait.

Voice Recognition

Similar to facial recognition technology, voice recognition works on the vocals of an individual. This technology can identify vocal characteristics unique to individuals and facilitate a transaction.

Though not as common as fingerprint and facial recognition, voice-enabled payments are on the rise. Users can read out a command or passphrase to authenticate payments in mobile wallets, banking apps, smart speakers, and more.

Iris Recognition

This technology scans a person’s eye to read unique patterns in the iris, i.e., the colored part of the eye. This technology also uses cameras at checkout counters or mobile devices to scan an eye and authenticate payments.

They are a perfect fit for payment services used in high-security areas like airports, government services, health care services, and more. Because this technology helps fight identity theft, it is deployed in places with security concerns.

Behavioral Biometrics

Another mode of biometric authentication is behavioral patterns. Not everyone has the same movements, the same rhythm of doing things, or the same use cases and interactions with digital mediums.

Payment gateways can detect such behaviors as typing speed, mouse usage, or how the user has interacted with the mobile’s display to identify the right personnel. This technology has the potential to be a widespread medium that works without extra user input. Say hello to the most frictionless payment experience.

Palm Vein Authentication

This technology captures the unique vein patterns on a user’s palm for authentication. This technology is used in places where physical contact is dangerous, such as healthcare facilities.

Plus, the palm vein is considered a better alternative to a fingerprint. Fingerprints are affected by age, disease, skin state, and more, but not palm veins, which remain the same from childhood.

Heartbeat Authentication

This technology is not deployed or put to use currently since it is still in the trial phase. This technology is built to identify and verify the unique patterns of a person’s heartbeat. The progress is gigantic and has the potential to be yet another safe, secure, and contactless biometric authentication mode.

Multi-Modal Biometrics

Not just biometric technology, but AI technology for dubious transactions is also evolving. Hence, multiple biometric modes can be used to enhance security and 2x authentication accuracy.

Activating multiple modes, say fingerprint and facial recognition or iris and voice recognition together would guarantee high security levels. Results? happy customers and accurate payment processing.

Tokenization with Biometric

Storing biometric data has another limitation: theft. Just like sensitive card information can be replaced with a digital identifier called a token for storage, biometric data can be replaced with a cryptographic token.

They are generally an alternative to a user’s identity and can be stored and used for authentication purposes. This leads to better privacy and security for the user’s data.

Advantages of Biometrics in Payments

But, with all the existing authentication mediums, why should you choose biometrics in payments? Here are some of the benefits of biometrics in payments:

• Enhanced Security - biometric features are hard to replicate because they are unique to every user. Passwords can be the same, PINs can be the same, but not biometric features.
• Reduced Fraud - biometric authentication is an extra layer of security. The one that scammers cannot pass through. Scammers cannot act like other users or steal their unique biological traits.
• Convenience - carrying cash or cards is not really a thing with biometric authentication. Users can initiate and complete payments without even monitoring passwords. They can just use any biometric mode and make a purchase, maximizing convenience and experience.
• Frictionless Transactions - biometric authentication is seamless and easy as opposed to entering passwords during checkout, hence reducing friction. Multiple taps and steps are replaced with just one activity, such as displaying a palm/fingerprint, eye, or face. Super easy, isn’t it?
• Reduction in Identity Theft - Scammers can steal card identities, but not the unique biological features of humans. It is very difficult for fraudsters to pass, say, a user's fingerprint or facial recognition.
• Improved User Experience - with reduced friction, users can enjoy an improved and seamless payment experience. The combination of convenience, ease, and security that biometric authentication offers enhances user experience.
• Lower Operational Costs - an initial investment is required for this technology, but it reduces operational costs in the long run. There are no other costs associated with this technology.
• Compliance with Regulations - this technology is compliant with country regulations. If you guarantee data privacy for your users, you may use their biometric data to facilitate payments.
• Future-Proofing - the benefits we see are just the beginning of this technology. It is evolving with a high adoption rate across the payments industry. This is a plan for the long run.

Challenges of Biometrics in Payments

Nothing exists without cons, and here are the challenges facing biometric usage in payments.

• Privacy Concerns - biometric data is private, and there can be user concerns or resistance to companies storing their biological or physical details.
• Security Risks - there are some security risks associated. Spoofing is the process of fooling authentication technology with fake artefacts.
• Accuracy and Reliability - storage of biometric quality has a direct impact on accuracy. When not done right, it can also reject a genuine user, creating friction.
• Interoperability - information exchange between different systems is a grave threat to privacy.
• User Acceptance and Adoption - not everyone is comfortable with using their biometric identity to make payments.
• Regulatory Compliance - biometrics is a user’s private data at the end of the day. It has to be handled with care, or there can be legal implications.
• Cost and Complexity - the technology is not widespread and comes with extra requirements like cameras and detectors; hence, gets pricey. Plus, it is often pretty complex to integrate and deploy.
• Single Point of Failure - if the authentication fails, the entire transaction will fail as well, creating user friction. Additionally, when compromised, there is no alternative access for users.
• Ethical and Societal Implications - biometrics are physical traits and hence might have ethical and societal implications.

Biometric authentication will change the face of payments. It is all set to offer increased security, efficiency, and convenience. But there’s more to this technology than we have already experienced. It is in the evolution phase right now as companies assess its pros and cons.

The future of biometric authentication in payments, however, is bright.