The payments landscape has evolved at an exceptional rate over the last few years, with the rise of contactless and the use of smart devices as well-recognised examples of new technology that has changed the way that customers pay. This evolution is set to continue as banking services and businesses look to introduce easier and more secure ways to manage payments, most notably with the use of biometric data in the authentication process. So what does this mean for your business and your customers?
What are biometric payments?
Biometric payments use biological and behavioural data, such as fingerprints, voice and facial recognition, as part of the authentication process when making a payment, be it online or in person. The introduction of biometric data being used in payments has created a new level of security, moving away from ‘something you know’ authentication such as a password or PIN, towards ‘something you are’ – a characteristic unique to the individual.
With the estimation that around 90% of passwords are easily hackable and the number of card fraud cases continuing to rise, it’s no wonder that the search for ways to tighten security for card payments has become a priority. 2018 saw the launch of the EU Payments Services Directive (PSD2), part of which included the introduction of Strong Customer Authentication (SCA), requiring card issuers to implement multi-factor authentication for all online purchases over €30 and increasing the scope to include not only a PIN or password but also integrating biometric data.
What are the benefits of biometric payments?
Biometric data can’t be lost or forgotten and is near impossible to steal or duplicate so for businesses, biometric authentication creates a new line of defence against card fraud as well as reduces the number of abandoned payments because of lost passwords and PINs.
Added to these security benefits are the enhancements that biometric payments can make to the customer experience. Gen Z, the digital-first generation who make up a growing proportion of today’s consumers, have greater confidence in sharing biometric data with banks and businesses than in previous generations. According to GlobalData’s 2018 Consumer Payments Insight Survey, two thirds of consumers are comfortable using a fingerprint or other biometric measure to secure their payment details, with only 11% opposed to the idea. With more emphasis on convenience and being able to manage their lives while on the go, today’s consumers have high expectations when it comes to customer service with biometric payments supporting these needs by facilitating easier, quicker, reliable and more convenient transactions, known in the industry as ‘frictionless’. Many businesses see the opportunity to use biometrics to streamline their payment processing and enhance the customer experience to gain that ever-important competitive differentiator.
While balancing customer experience with data security will continue to be an ongoing challenge, we should expect to see even greater focus on biometrics over coming years, steadily becoming commonplace as technology is further developed and deployed.
The expansion in use of biometric data in the payments process increases the need for revised regulation and compliance obligations. The new PCI DSS v4, the launch of which is expected in late 2020, will encompass new payment technologies to ensure that businesses maintain robust payment processing security to protect you and your customers from cyber-attack, data security breaches and card fraud.
Here at PCI Telecom, we create bespoke card payment processing solutions that meet the needs of businesses whatever their shape and size. Our solutions are not only accredited to a Level 1 standard for PCI DSS compliance but are also compatible to meet the requirements of SCA for online transactions. You can find out more about our online payment processing solutions as well as our over the phone card payment systems by visiting our Solutions page or get in touch to discuss your requirements in more detail.