Biometric authentication for mobile payments has emerged as an important tool for financial institutions seeking to improve security without adding unnecessary friction to the customer experience. Fingerprint recognition is already widely associated with smartphone authentication, but the greater opportunity lies in combining multiple biometric and behavioral signals to establish a more reliable digital identity.
However, stronger authentication alone cannot drive widespread mobile payment adoption. Consumers must also be able to use their mobile devices where they shop. Merchant acceptance therefore remains a critical piece of the equation. As banks develop their biometric authentication strategies, they must consider not only new biometric hardware but also the increasingly sophisticated identity signals that existing smartphones can collect.
This article in Planet Biometrics argues that ‘a “prudent mix” of biometric running on smartphones offers the best opportunity of clocking growth rates of over 200% in 2016.’ The idea that biometrics alone will help clock growth rates of 200% is silly and the need to utilize multiple biometrics is already well recognized as indicate by the fact that Google has already stated its intent to eliminate passwords before the end of this year and is already testing these multimodal solutions with banks. The article states:
“Current systems will need to add biometrics in order to hasten adoption and meet expectations of astronomical growth rates, according to a study by Lux Research.
In terms of modalities, a “prudent mix” of biometric running on smartphones offers the best opportunity of clocking growth rates of over 200% in 2016.”
The problem here is that biometrics can’t help grow payment transactions if mobile devices aren’t accepted at merchant locations. Today acceptance is a much bigger problem than biometrics.
The article is based on a research report from Lux Research “Securing Mobile Payments with Biometric Authentication.” While the research appears to offer a reasonable evaluation of different biometric hardware technologies including palm vein sensors and iris scanners, it appears to ignore user biometrics that can be collected using existing mobile sensors, such as voice, accelerometer and cameras. If this article is accurate it also ignores the fact that smartphones are already utilizing fingerprint scanners for payments and access to bank services.
That said, data from fingerprint scanners will be combined with information related to gait, facial, eye recognition, vocal structure, and emotional state and will provide authentication sufficient for most consumer payment and banking transactional needs in the very near future and banks need to establish a strategy to deal with this fact.
The future of biometric authentication for mobile payments is likely to extend far beyond a single fingerprint, facial scan, or other physical characteristic. Smartphones contain an expanding array of sensors capable of capturing signals such as voice, facial characteristics, movement, and other behavioral patterns. Combining these factors could allow financial institutions to authenticate customers more continuously and accurately while reducing reliance on traditional passwords.
Multimodal biometrics could consequently become an important component of both mobile payments and digital banking security. Yet authentication technology addresses only one barrier to adoption. Consumers also need broad merchant acceptance and payment experiences that are convenient enough to encourage regular use.
For banks, the implications extend beyond choosing a particular biometric technology. Financial institutions need strategies for incorporating multiple authentication signals into their broader security infrastructure while maintaining usability and protecting customer information. As smartphones become increasingly capable of establishing identity through passive and active signals, biometric authentication could fundamentally change how consumers prove who they are when accessing financial services and making payments.
Overview by Tim Sloane, VP, Payments Innovation at Mercator Advisory Group
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