Touch-free authentication for all: why we need a safer payment method in the ‘new normal’
By David Orme, SVP, Sales & Marketing, IDEX Biometrics ASA
Ever since March, when the World Health Organization encouraged people to not use cash, coronavirus has made touch-free shopping a necessity for all consumers. However, as economies across the world begin to reopen, we are seeing in-person shopping and payment via touch-pads return. So, with payments beginning to return to ‘normal’, the global payments industry must now consider an important question: how can we protect consumers from the pandemic and potential future health crisis’ during the transaction process?
During the pandemic, touch-free payments began to gain international traction across the world, changing behaviour during the payment process. While previously, consumers were happy to key in a PIN, or even provide a signature for a purchase, they are now familiar with more convenient and safer touch-free methods, and they’re not likely to let them go.
In Europe, high street chains have rapidly shifted to contactless payments, often refusing to accept cash. Meanwhile in the USA, levels of contactless payments have rocketed since the pandemic, after a slow initial adoption of the service – US banks only adopted contactless cards in 2019 compared to 2007 in the UK. According to Visa, overall contactless usage in the USA has grown 150% year-on-year as of May 2020.
Even mega-retailer, Walmart, has recently introduced contactless options for in-store shopping and delivery to protect its customers during the pandemic – showing there is growing demand for a touch-free and convenient way to pay across the world. This has raised awareness of touch-free payments among consumers looking to reduce contact-based interactions and time spent at the checkout during the pandemic.
Mobile payments are growing
Mobile payments are growing, again showing the desire for touch-free authentication among consumers. According to Forbes, the US mobile payment market – currently only sixth in the world – has increased 41% and is worth more than $98 billion.
To respond to the growth of touch-free payments among small vendors, PayPal has launched a new QR code-based payment app that allows market stall holders or businesses without a PoS machine to accept payment through a code. This means even the smallest of merchants, from small stores and farmer’s markets to craft sales, can now go cash-free and use touch-free payments for everything.
Meanwhile, China has long been using QR code-based apps, such as WeChat Pay from tech giant TenCent and AliPay from Alibaba. The apps are so widely used that street vendors display QR codes for payments and together the two fintech giants control about 90% of China’s digital payments market.
But card is still king
At the same time, payment cards are still consumers preferred way to pay. Of course, we only need to look to Apple and Google, who recently have launched physical payment cards despite running mobile payment apps for further proof that payment cards are far from dead.
So why aren’t cards on their way out, given the growth of mobile payments?
We know that consumers still look to payment cards for security and a sense of familiarity while shopping. According to IDEX Biometrics’ research carried out in the UK, only 3% of consumers choose to use mobile payments, while nearly two-thirds (65%) state that carrying their debit card provides a sense of security. And when it comes to touch-free payments, only biometric payment cards can provide the most secure level of validation with an easy digital experience for shoppers.
Despite the popularity of WeChat as a payment app, China’s biggest card provider China UnionPay has recognised that its customers aren’t ready to give up on physical payment cards either. China UnionPay has recently certified the first biometric fingerprint card technology in the country as they look to the use of biometric technology in cards to provide an extra layer of security, with added convenience and hygiene during a payment transaction.
Secure touch-free card payments
Biometric fingerprint payment cards provide end-to-end encryption – securing the user’s card and data. A fingerprint biometric card allows the user to authenticate their ID by touching their finger to the card’s sensor while holding it over the contactless card machine. Therefore the shopper only has to hold their own card over the PoS system and the entire transaction process is free of public PIN pads or checkout counters – making it no different to how consumers currently use contactless payments cards. This touch-free payment technology provides the consumer with the convenience of contactless or a mobile payment but with far greater security, as the card is personally tied to the owner.
Biometric identification is already firmly incorporated into our everyday lives. Thanks to unlocking our phones and authenticating payment apps, we are increasingly using our fingerprint to verify our identity. Now that consumers are familiar with the technology, biometric identification in payment cards will become essential to help consumers navigate the shopping and transaction process safely, speedily and securely.
As our economy gradually reopens, financial services providers must protect consumers during the transaction process. In stores, on transport systems – even in stadiums – a fingerprint biometric payment card will provide touch-free payment authentication for all.