How biometric payment smart cards are radically transforming the payment industry innovation process

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Introducing the biometric payment smart card
Silently in the background, a group of disruptive fintech’s have been busy creating the next innovation wave to rock the industry and transform the physical card as we know it. Not only will this address security concerns, but it will break down barriers to bolster the popularity of the contactless card. Make way for the biometric smart payment card.

Due to its highly unique nature, a fingerprint is extremely secure and therefore an ideal technology to layer on additional security features within end markets, including payments, where multi-factor authentication is becoming the norm. However, getting a fingerprint sensor on a card has – until now – been a challenge. Cards are extremely thin, lightweight and are passive in nature with no built-in active power source. This is where innovative fingerprint recognition systems come into play, now ready to be attached to the everyday payment card used across the globe.

The use of “off-chip” fingerprint technology allows card manufacturers to simply add a very thin fingerprint sensor to any card. This means costs are kept to a minimum, allowing the technology to be deployed at low cost.

This, combined with the ability to remotely enrol from the comfort of your home, means that the use of biometric payment technology will be accessible to all. As a result, IDEX anticipates that each banking customer will deploy as many as 100,000 biometric cards to their account holders by the end of 2018 and that biometric bankcard issuance will grow into many millions from 2019.

People making card payments will no longer have to compromise security for convenience, thanks to a frictionless approach that utilises the now familiar biometric authentication, with no consumer habit change required. With the £30 transaction cap becoming a thing of the past, along with the need for a PIN or signature, biometrics will prove even more convenient than cash, further moving us towards a cashless society.

The reality also is that it isn’t just the payment landscape that biometric smart cards are making waves in, the innovative technology is driving significant convergence opportunities thanks to the synergies shared between payments and other applications including identification, access control, ticketing, and loyalty.

The bigger picture of biometric benefits
In addition, the use of such biometric technology in the payment space will help to address the global issue that is financial inclusion. Using biometric authentication, individuals that face challenges with illiteracy or health limitations that affect memory will be able to once again enjoy the shopping experience without fear of not being able to enter a pin or sign their signature.

While the market’s priority is to create a frictionless experience, security threat vectors continue to evolve and cybercriminals are on the lookout for ways to outsmart security protocols. The industry must therefore always be two to three steps ahead to adapt and add layers of security. Smaller and more agile players in the market are ideally positioned, closer to the action with their finger on the pulse, or the card, constantly testing innovations to address threat vectors before they become a problem.

Make way for agile fintechs
Phil Sealy, analyst at ABI Research comments: “Not only will the introduction of biometric smart payment cards be the innovative step the industry needs to combat fraud and security concerns by future proofing the traditional payment card, but the technological awakening will raise the importance and profiles of previously overlooked, yet agile, players in the ecosystem.

“What this means for the payments landscape is that big leads in innovation are more commonly coming from the smallest players at the bottom or on the fringe of the metaphorical value chain, being fed through card to manufacturers and then delivered to issuers – turning the traditional chain of command on its head. For example, biometric chips can be created, tested and delivered by independent specialists, direct to card manufacturers, who then work directly with card issuers to get product to market via banks.

“Market giants can now make the most of agile fintech partners to bring innovations to the market faster, safer and more effectively than ever before. These new key partnerships are creating a healthy collaborative ecosystem, making smaller players, traditionally operating at the component or sub-card assembly level, more important and influential than ever before,” states Sealy.

https://www.itproportal.com/features/how-biometric-payment-smart-cards-are-radically-transforming-the-payment-industry-innovation-process/