Biometric smart cards are emerging as the next innovation in payment cards.
Based on ABI Research the payment card is here to stay and fingerprint authentication inside the card is the next natural development to retain advantage while increasing safety. So, let us take a look at the potential and status of the technology to understand why 2018 is defined to be the turning point for on-card biometrics.
Solving real-life issues with a touch
Each year, around 4 billion smartcards are offered worldwide. They’re largely payment cards and approximately half of these are contactless. And, all these numbers are increasing year on year as we move closer towards cashless societies, but advantage has to be balanced with safety to drive consumer confidence.
Our consumer study revealed that individuals around the globe want to use their contactless cards more often, but safety concerns and transaction caps are holding them back. Indeed, 38% of consumers see safety as the primary barrier to use. In addition to this, a market study from Visa indicates that one in five (20 percent ) Europeans use the exact same PIN on more than 1 payment card, and one in six (16 percent ) discuss their card details with family and friends. They know this is a risky behaviour, but still do it because advantage always wins.
On-card biometrics is the last piece of the puzzle to bring security and trust to contactless payments without compromising convenience. Consumers are knowledgeable about biometric authentication in the mobile world and so recognize the value it can bring to their cards.
Benefits for banks, retailers and customers
Importantly, the advantages are numerous and wide ranging for all stakeholders:
Banks can open up many opportunities to grow the usage of payment cards, while reducing fraud and customer frustration. New technology may also enable them to bundle with other services that are innovative. Being at the leading edge brings increased standing and trust, which then can lead to new customers.
Retailers will see more through-put in shop as more customers use contactless and spend less time in line. And this often contributes to higher spend since there is less time to second-guess purchases. This is going to be more noticeable if the contactless payment cap is eliminated. In general, more and more secure shopping experience, all with the present dual-interface payment terminals.
Consumers are the real winners . They have been given contactless to create their lives easier and faster, which it has. A current infographic from Barclaycard visualizes how long is in fact saved using contactless rather than chip and PIN and money, and it adds up over a lifetime. However, the absence of authentication has left many uncomfortable. Now, with on-card biometrics, they could retain the speed and convenience of contactless, only with additional confidence.
Collaboration is the key
It’s exciting that customers are driving demand for new features and the industry is working hard to answer the telephone. To make it happen, however, players from the whole eco-system should work together.
Biometrics leaders such as Fingerprints are leading the charge. We’ve carried our experience from the high-volume smartphone detector market and are now in the forefront of innovation in creating biometric payment cards a reality.
Solution providers like NXP, Zwipe, Linxens, CardLab are adapting and developing elements and solutions like secure components, prelams and inlays to match the new requirements.
Card Manufacturers such as IDEMIA, Kona and Gemalto are manufacturing and developing the wise cards and working with the card issuers.
Payment schemes like Visa, and Mastercard and standardization bodies such as EMVCo and Eurosmart are working to make sure that technologies are interoperable, secure and secure to ensure a sustainable and standardized business.
Issuing banks and large retailers are discussing their needs to ensure the perfect product for their clients.
So, where are we now? Trials have recently been declared with AirPlus, Visa in the U.S. and Cyprus, and you will find others are underway. The technology is ready to scale with reduced power consumption and the necessary biometric functionality, and it may be incorporated into cards with current manufacturing methods, working with existing contactless point of sales terminals. Lastly, the all-important pull out of the industry is there.
All this comes together to create 2018 the year of on-card biometrics. Watch this space!
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