The Challenges of Using PINs

The PIN has long been the standard method for authenticating a card user’s identity, with the approach first being introduced to ATMs in the late 1960s. In addition to facilitating financial transactions, PINs have also been used to verify access to specific locations and computer networks or systems. However, after decades of use for private data exchange, the PIN is now at the end of its usefulness. The increasingly digitized world we live in requires a more robust means of authentication.

The introduction of digital ID (the information held about a person or organization online, by which they may be identified) is superseding the traditional verification method. This evolution in authentication seeks to address many of the issues caused by PINs, improving both data security and customer satisfaction.

The Challenge of PINs

The PIN is typically a sequence of four numbers, initialized with a financial institution to allow the cardholder to carry out transactions such as payments in retail outlets and withdrawals at ATMs. Yet this method is not entirely secure, as the relatively short number sequence may be easily guessed or discovered by fraudsters, particularly if the cardholder has changed their PIN to a number that is more memorable to them, such as a birth date. With the advent of contactless card payments, a cardholder is typically called upon to enter their PIN only occasionally, meaning that the card may be used without restriction or user authentication. This means that “card present” fraud has become a very real problem for financial institutions [1] and affects consumer confidence. When the card is used for online purchases, as is increasingly the case for many shoppers, typically no authentication is required at all, highlighting once again that PINs are no longer the optimal approach for security.

The PIN is also ineffective at delivering the kind of experience that the modern customer demands. Today, a personalized, convenient, and easy experience is expected by consumers. The need to remember and enter a PIN is increasingly seen as a delay in carrying out a transaction. There are also transaction limits for contactless payments, which can be an additional irritation for customers wanting a rapid and seamless experience. This approach is also a barrier to financial inclusion, as those with Dementia, Alzheimers, and the elderly can struggle to remember a PIN.

The Benefits of the Biometric Payment Card

There is a solution that affords customers a seamless, rapid experience whilst upholding robust means of digital ID verification and data security. A biometric payment card, which is a payment card with a fingerprint sensor, allows the authorized cardholder to carry out transactions in person or online without the need to provide further means of authentication. This ensures that financial activities may be carried out swiftly and without limits, using your unique fingerprint to carry out transactions with accuracy, convenience, and security. We will further explore the advantages of biometrics in the next post in this series.