Secure Fingerprint Sensor Solutions
The use of digital wallets is on the rise, yet for now, many people still prefer to use a payment card for their everyday transactions. Indeed, although the global digital payments market is predicted to continue to rise in value to exceed $204 billion by the end of the decade [1], it seems that the familiarity and convenience offered by a payment card is still hard for many to customers to give up.
In July 2022, there were 1.9 billion debit card transactions in the UK alone [2]. In the USA, debit card transactions accounted for 30% of all retail transactions in 2021 [3]. Meanwhile, digital wallet transactions are forecast to exceed US$12tn by 2026 [4]. Whilst much has been made of the rise of digital wallets, the payment card industry has also been delivering its own innovations by introducing technology to make these cards more secure than ever.
The fight against fraud
Such innovations are to be welcomed, as fraud remains a significant threat to the payments industry. In 2021, payment cards issued in the UK alone suffered losses of more than £574 million due to fraud. Meanwhile, in the US, CNP or “card not present” fraud alone affected 7.9 million consumers in 2018 [5][6], and CNP fraud is now cited as accounting for 65% of all fraud activity [7].
As a result, financial institutions have been feeling the pressure to ensure that the payment cards they offer their customers are designed to provide robust security measures. Biometrics has become the leading solution, as a fingerprint sensor may be inexpensively and unobtrusively built into a payment card, with no loss to the convenience and speed of transactions.
Based on the principles of secure multi-factor authentication, by which an authorised user must provide two or more items comprising something they know (such as a password or PIN), something they have (such as the payment card itself), or something they are (such as a biometric marker like a fingerprint, face, or voice), the latest payment cards provide more protection against fraud than ever before. Rather than needing to remember a password or PIN, the customer needs only to touch their finger to the sensor in order to make payments quickly and smoothly.
Outsmarting fraudsters with a fingerprint sensor
Of course, talented criminals were quick to attack the new biometric authentication methods when they were first introduced, and fraudsters using fake fingers with falsified fingerprints were able to hack into sensor secured devices such as the 2014 Apple iPhone. As a result, the latest contactless payment cards now feature fingerprint sensors with built in anti-spoofing technology, which prevents fraudulent misuse of the card. Developing this technology for a card has certainly proved challenging, as a payment card has no processor or external battery source.
However, the Secure Element chip within a payment card certainly offers a range of benefits when it comes to securing its use, as it is not connected to online (hackable) computer systems. This means that biometrics can still be seen as the most effective defense against fraud, now and in the future.
Resources:
[1] https://www.vantagemarketresearch.com/industry-report/digital-payments-market-1451
[2] https://www.ukfinance.org.uk/data-and-research/data/card-spending
[3] https://www.statista.com/statistics/568523/preferred-payment-methods-usa/
[4] https://www.nfcw.com/2022/08/02/378379/global-digital-wallet-spend-to-exceed-us12tn-in-2026/
[5] https://www.ukfinance.org.uk/policy-and-guidance/reports-publications/fraud-facts-2021
[6] https://www.thalesgroup.com/en/markets/digital-identity-and-security/banking-payment/digital-banking/dcv#:~:text=In%20the%20U.S.%2C%207.9%20million,reserve%20in%20a%202018%20report.
[7] https://mint.intuit.com/blog/planning/credit-card-fraud–statistics/
