Why the Contactless Smart Card with Biometrics Will Dominate the Payments Industry
In the first post of our series on Contactless Smart Cards, learn why contactless smart cards are given more importance in the era of digital wallets.
The introduction of digital wallets has undoubtedly increased customer choice, and this payment method certainly offers a range of compelling benefits, such as convenience of use. Yet, overwhelmingly, the figures show that consumers still feel an overall lack of trust for these newer payment methods, and still prefer to use a contactless smart card.
Whilst cash transactions have fallen out of favour in recent years, and experts predict that over half of the world’s population will be using digital wallets by 2025, the most recent figures suggest that fewer than half of the public currently trust this payment system. Meanwhile, a mighty 64% say that they have confidence in banks, indicating that the contactless card will remain a stalwart of the payments industry throughout this decade.
Why Consumers Distrust Digital Wallets?
With 47% of those surveyed saying that they do not trust digital wallets, it’s important to explore the reasons why. There appear to be four key areas of concern: data privacy, fear of an unfamiliar payment method, a perceived lack of regulation, and negative publicity relating to the fintech sector. Data privacy is a critical topic at present, and the public is becoming increasingly wary of entrusting their data to third parties. Banks, it seems, are held in higher regard when it comes to these factors: seen to be held to more rigorous regulatory standards, and already a familiar and trusted way of managing money, many consumers are happy to continue to use their services rather than risk trying an unknown technology.
The Problem Of The Contactless Smart Card
Unfortunately, that trust can be somewhat misplaced. Card fraud levels are increasing, with the losses in 2019 alone reaching close to £400 million in the UK . This includes card-present fraud activity, indicating that the current form of contactless payment card is not fit for purpose. Indeed, whilst 81% of cards include chip and PIN security measures, the levels of theft, fraud and loss are continuing to rise, and, as the popularity of cash declines, it’s evident that more stringent controls are needed.
The Answer Lies In Biometrics
There is however a cost-effective, convenient solution already available for use by the payments industry, and one which is starting to be embraced by consumers. Embedding fingerprint sensors in contactless smart payment cards will not only provide a highly secure method of authentication, but will also deliver the sense of familiarity and trust that consumers value. After all, people are already accustomed to using this technology for gaining access to smartphones and tablets, and, by including biometric authentication in contactless cards, customers can enjoy the benefits of unlimited amount, secure transactions, without the need to memorise a PIN.
The Time To Act
It seems certain that contactless card payments will continue to be the preferred option for consumers for years to come, so the time is right to secure them. The simple and effective solution is fingerprint recognition technology, which will allow consumers to make transactions with full confidence, offering precious peace of mind.