As financial institutions expanded their digital payment capabilities, biometric authentication emerged as an important tool for improving security and convenience. Banks faced a choice between incorporating fingerprint recognition directly into payment cards or leveraging the biometric capabilities already available on consumers’ smartphones.
Mobile banking applications offered a potentially more cost-effective approach, allowing financial institutions to authenticate customers across multiple channels without introducing additional hardware into payment cards. At the same time, manufacturers of biometric payment cards argued that fingerprint-enabled cards could strengthen contactless payment security and reduce reliance on transaction limits. The debate highlighted competing approaches to biometric authentication, particularly as the COVID-19 pandemic accelerated interest in touch-free payment technologies.
Mobile Banking Apps as a Central Authentication Platform
Every financial institution should deploy a secure mobile app to account holders with a mobile device and leverage that app for authentication across all consumer channels, including e-commerce, using EMVCo 3D Secure. By standardizing on the mobile device app, overall security is greatly enhanced, as is your brand awareness.
The Cost and Complexity of Biometric Payment Cards
Putting a fingerprint on the payment card is relatively expensive as it represents an additional infrastructure that needs to be maintained and adds cost for the card-based fingerprint reader itself. But manufacturers of card-based fingerprint readers are pushing hard:
Contactless Payments Drive Interest in Biometric Cards
“From facilitating hygienic payments to enabling secure remote working, biometrics has truly proven its value in recent months.
In payments, momentum was already gathering before the pandemic for biometric payment cards, with the first biometric payment card certified by a payment network in early January. The recent rise in popularity of traditional contactless cards as a more hygienic, convenient payment option has also further highlighted the benefits of biometrics in payments. By adding strong authentication to contactless cards, banks finally have the ability to remove the contactless cap and deliver consumers a truly ‘touch-free’ contactless payment experience, regardless of the amount.
Industry Expectations for Biometric Payment Technology
Unsurprisingly, adoption timelines have accelerated in recent months, with BNP Paribas announcing its fast-tracking launch of its first commercial biometric payment cards this autumn. With more banks predicted to follow in quick succession, we estimate that by 2026 around 3 billion biometric payment devices will be shipped every year, including wearables, USB dongles and other form factors too.
In the security market, the business case for biometrics has also become clearer. With flexible working becoming the ‘new normal’ and the vehicle industry turning its eye to biometrics, it has become clear that more secure, convenient and hygienic access control solution are more important than ever before.”
The debate over biometric payment cards and mobile authentication reflected different approaches to achieving stronger payment security. While fingerprint-enabled cards offered a familiar contactless experience, they also introduced additional hardware costs and infrastructure requirements for financial institutions.
Mobile banking applications presented an alternative by using devices consumers already owned. Combined with authentication standards such as EMVCo 3D Secure, these applications could support secure transactions across banking, e-commerce, and other payment channels.
Ultimately, the decision involved balancing security, convenience, implementation costs, and customer adoption. As biometric technologies continued to develop, financial institutions had opportunities to evaluate which authentication methods best supported their payment strategies without introducing unnecessary complexity.
Overview by Tim Sloane, VP, Payments Innovation at Mercator Advisory Group
