November 21, 2016 | Categories: Payment Processing Back to list

What Are Biometric Payments?

What Are Biometric Payments?

Thanks to new technology, our choice of payment methods if constantly evolving. One of the latest buzzwords in the retail sector is biometric payments, and research shows that there is a growing demand for them, but what are they and how do they benefit both retailers and consumers alike?

What Are Biometric Payments?

The battle against fraud is ongoing, and biometric payments are perhaps one of the most sophisticated advances in POS systems. The system often works in two steps: they use biometric information such as finger print, and a four-digit pin number.

Before the purchaser can use the technology, they are asked to register by using their ID and bank account details. Once registered, the buyer’s details and biometric information are recorded on a database and they can choose biometric payments as their preferred method for future purchases.

The Move Towards Biometric Payments

Biometric payments are in use around the world, and they are starting to gain interest from high-profile companies. As an example, MasterCard has been working in conjunction with BMO to take the lead in the industry, and in March 2016 the credit card company became the first to offer a biometric card program to corporate buyers who purchase online. The program, which has had a limited launch in the United States and Canada, uses facial recognition and fingerprint biometrics.

Steve Pedersen, Vice President, Head, North American Corporate Card Products, BMO Financial Group, said:

“The use of biometric technology has become more common for consumers looking for convenient and secure ways to make purchases using their smartphones, so this was the natural next step for us as innovators in the payment security space.”

The Benefits of Biometric Payments

There are numerous advantages to using biometric payments.

  • By far, the most notable benefit of biometric payments is the added security they offer. Credit card companies need to constantly find ways to beat fraud, and biometrics are one way of achieving this.
  • With fraudulent transactions posing such a large problem, consumers need to have confidence that the payments they make are going to be more secure, and crucially, biometric payments have the confidence of consumers.
  • Research conducted by MasterCard found that 83 percent of the consumers who used biometric felt it offered them better protection than passwords alone, however, the added convenience biometric payments provide has also approved attractive to shoppers.
  • Consumers feel that biometrics are more convenient than passwords, and the more convenient a method of payment is, the more likely it is to catch on.
  • Another factor that makes biometric payments more attractive to buyers is they feel their information would be safer. If a two-step system was being used, research from Visa shows that shoppers would be confident that even if they lost their mobile device, their payment information would remain safe.
  • Biometric payments also tie in well with the growth in mobile payments. The use of smartphones is making shoppers more confident with biometrics, and with Juniper Research predicting that 770 million biometric authentic apps will be being downloaded every year by 2019, biometrics are a definite part of our future.

Biometric Payments and Their Growing Acceptance

MasterCard, Apple, Halifax Ban, IDEX and Samsung are among others who have introduced biometric payment methods in various forms. Apple and Samsung Pay prefer fingertip identification, while Visa is exploring iris technology, and the Halifax Bank is investigating heartbeat technology.

Biometric technology is something that consumers are familiar with, which should help ease the introduction of biometric payments; biometrics are already a regular part of smartphone use, with Apple and Samsung already implementing fingerprint biometrics. In 2017, Statista predict that more than a third of us will own a smartphone, and mobile payments are growing exponentially, if – or when – biometric payments becomes more mainstream consumers will be accustomed to it.

Moreover, as contactless payments and embedded wallets are being increasingly used as payment methods, it is predicted that there is set to be a greater demand from shoppers for biometrics. Visa’s research, which interviewed 14,000 consumers, revealed that 68 percent wanted to use biometrics to pay for goods.

Commenting on the research, Jonathan Vaux, Executive Director of Innovation Partnerships, said:

“Biometric identification and verification has created a great deal of excitement in the payments space because it offers an opportunity to streamline and improve the customer experience. Our research shows that biometrics is increasingly recognised as a trusted form of authentication as people become more familiar with using these capabilities on their devices.”

In addition:

  • The research from Visa also indicates how ecommerce retailers could benefit from this form of payment as it helps to reduce customers’ security concerns, and 40 percent of consumers say they want to see biometrics being accepted for online payments.
  • The additional level of security available through biometrics is a feature that would be welcomed by consumers, as 37 percent state they haven’t completed an online purchase due to security concerns.

However, as things stand, there won’t be many merchants who are ready to accept them, and as noted earlier in the article, there is demand for biometric payments from consumers.

Biometrics and Security Risks

As detailed earlier in the articles, biometric payments do offer a greater level of security than passwords however, they are not without their security flaws. It is possible to forge fingerprints, which at the moment are the most widely used biometrics, however, as technology advantages these potential security problems are likely to become less prevalent.


New technology has the power to change many aspects of our lives, and the way we shop and pay for goods are both areas that are continuing to see a significant transformation. However, as more of us take advantage of these advanced technologies and turn to smartphones and mobile payments, there is a greater need for enhanced security.

With so many advances in the field of biometric payments, this could be the solution that both retailers and consumers are looking for when it comes to making secure, convenient transactions.

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