Breaking down the cost barrier with enhanced low-cost sensor technology and biometric-system-on-chip ASIC
In our fourth post in the series on ‘Are we at the tipping point for global biometric payment card adoption?’, David Orme, SVP of Sales and Marketing at IDEX Biometrics, discusses breaking down the cost barrier with enhanced low-cost fingerprint sensor technology and biometric-system-on-chip ASIC.
Developing secure payment systems has been a long battle but payment cards fitted with a fingerprint sensor are an important landmark. There have been four main challenges to overcome; technology, durability, security and cost. In reality, all of them are technological challenges.
Although they are still in trial, the first three questions have been answered. The technology works, the cards can survive their owner’s pocket, and keeping personal biometric information on the card solves most security and privacy concerns. With card and other banking fraud soaring, most customers will welcome these cards but only at the right price.
Better tech costs less
Factors that can increase the cost of a card with a fingerprint sensor include the number of components, the lamination procedures and the power source.
Batteries prove problematic in several ways – their cost, bulk, fragility, limited lifespan and sensitivity to the lamination process. All of these problems were eliminated when IDEX was able to produce a high accuracy sensor that works on current derived from the radio emissions of the card reader.
Early cards with multiple components embedded in several lamination layers were both more costly and difficult to manufacture. That problem was overcome by combining the required electronics into a single biometric system on a chip (ASIC). Although the development of an integrated chip is costly, once mass-produced, there are significant savings. In turn, they also greatly simplify the lamination requirements, solving numerous manufacturing difficulties and further reducing costs.
The costs of fraud
Whatever the cost of the cards, it is offset by the cost of the fraud they will prevent. In 2017, 16.7 million Americans were the victim of fraud, losing $16.8 billion. Globally, an FBI estimate put card fraud alone at $28 billion, and another $32 billion stolen online. In the two years since those figures were gathered, there has been a surge in the fraudulent use of stolen cards and bank data, so the damage currently could be 50% higher.
Most of these losses are reimbursed to customers by their bank or lender, but those costs are returned to customers in the form of charges, interest rates and inflation. Investigations and prosecutions add more costs. The criminal proceeds then flow to organized crime, drug traffickers and terrorists – more costs in both human and financial terms.
Research by SmartMetric in early 2017 concluded that 67% of US credit card holders are willing to a whopping pay $69.95 for a biometrically secured card. . Recent ABI Research suggests a figure of around $20 compared to the $2 of an ordinary EMV chipped card. As we all know costs drop quickly as volumes increase: for example today’s smartphone fingerprint scanners have dropped to around $2 per unit. If we apply the same economies of scale principles to biometric payment cards then we’re talking $5 per card
When the high cost of fraud is taken into account, banks could issue biometric cards for free and still save money.
The previous post in our series on ‘Are we at the tipping point for global biometric payment card adoption?’ looked at contactless cards over future tech solutions and which is getting the maximum vote?