The payment industry is evolving at an alarming rate. Biometric cards have become the newest innovation after contactless cards. The need for speed, security, and convenience is driving innovation in the payment industry faster than ever.
Definition: Biometric cards
Biometric cards can be mistaken for ordinary debit or credit cards in external appearance and size. However, the cards work differently. They utilise technology which is similar to that in iPhones, i.e., instead of having a chip that records a person’s PIN, the cards have a small circuit board and a sensor. A customer’s identity is authenticated when they place their finger on the sensor because it recognises the fingerprint.
Biometric Cards vs. Chip and PIN cards
To understand biometric cards in-depth, it important to compare the cards with chip and PIN cards in regards to three main factors namely; speed, convenience, and security.
Biometric cards are faster than cards which require a PIN. Furthermore, you don’t need to memorise numbers. Biometric cards authenticate in seconds since cards are held near a contactless payment terminal or handed over.
There are restrictions in regards to contactless payments currently as banks allow payments not exceeding £30 due to security concerns. Since fingerprint recognition is infallible, many card provides in the future are expected to abolish limits to contactless payments. This will see more convenient and faster check- outs. Biometric cards are powered by card readers, so they don’t need batteries to work. This translates to a limitless no. of transactions using biometric cards.
In regards to security, biometric cards are expected to reduce card-cloning, card theft, and card skimming incidences. In 2017 alone, fraud related to the current payment methods cost UK consumers approximately £1 billion.
A key security feature of biometric cards is – fingerprints are stored on the card as opposed to a database. Furthermore, payment is made without an internet connection. In cases where a biometric card is stolen or lost, the fingerprint is stored as a numbers template which is then encrypted. Fingerprint images aren’t stored as visual images as many people might imagine.
Trying to steal money using an artificial finger wouldn’t work since the card sensor utilises electrical capacitive sensing. In simpler words, the sensor has been designed to recognise a real finger.
Will payment cards be practical in the future?
The obsolescence of biometric cards has been assessed by experts. Some have questioned the need for biometric cards without ignoring the fact that they are superior to present cards. The ongoing debate revolves around the viability of plastic cards as a feasible payment option. The increasing use of Smartphones and wearable tech has challenged the longevity of biometric cards. Mobile money and wearable devices are capable of rendering biometric cards obsolete in the future.
The cost factor
Biometric cards have been developed with existing payment terminals in mind. As a result, retailers won’t need to buy new payment terminals as was the case when contactless cards started being used. For card providers, producing biometric cards costs more than producing Chip and PIN cards because biometric cards need a circuit board. However, the cost of production can be shared. It all depends on how popular biometric cards will be and how far consumers are willing to pay to use them. The cost factor may not be a significant issue if production cost is shared with consumers via payment fees.
How popular can biometric cards be?
According to initial research done by Visa among Europeans in 2016, there was an initial interest in biometric cards provided they had appropriate security measures. The research showed that 80% of those polled believed fingerprint recognition was undoubtedly the most secure/safest biometric technology. Most people share the same sentiments today.
When should we expect biometric cards?
There are tests underway while others have already been concluded. MasterCard carried out biometric card tests in South Africa last year (in 2017). The financial services multinational is now doing similar tests in Bulgaria. Visa has tests underway with the assistance of Bank of Cyprus and Mountain American Credit Union. Other financial institutions which have taken significant steps include digital security companies like Gemalto which is currently in talks with several UK financial institutions. It is quite accurate to conclude that biometric cards will be mainstream in 2 to 5 years time.