The blogs highlights the evolution of biometrics and explains how this technology has been used in the payment cards industry.
Twenty years ago, the typical everyday bank card was just an ISO standard card with a magnetic tape read by any POS or imprinted with the universal benefit of fitting a standard-sized wallet. Today we find ourselves with that same card supporting encryption, multi-applications, power harvesting features, NFC, and so much more.
All this adds up to make the payment experience more secure, convenient, and ubiquitous, regardless of where we are in the world. Compared to all other payment methods sitting in that same wallet, technological advancement of the humble bank card has been phenomenal.
You would expect that this advancement comes at a cost, both in terms of usability and financial outlay. However, neither has been the case. On average, consumers pay no more to access these features and their reliability is never even questioned – despite the pretty hostile environment that many cards are subject to. The bank card has, therefore, proven itself, to be the most preferred payment method, and has advanced at such a pace that it has seen off every potential challenger.
It works, so why change it?
With all the technology now available, there is one thing that also had to change: Consumer needs to be so much more aware of how and where to use the card. What was once just a check for the right scheme logo and a signature has now become a different set of acceptance rules and limits depending on where you are in the world.
Friction has consequently increased, as well as the fact that we should remember different PINs of each and every card in our wallets. Not only this, we have to be careful whether someone is looking over our shoulders while we type the PIN at a payment terminal. Also, the recent contactless limit increase in many countries has made our payment cards a more valuable target for thieves.
Contactless payments are commonplace, but there are variations on what you can spend, and these differ according to specific circumstances, causing confusion to consumers. Regulatory changes (PSD2 directive) place upper limits on the number of taps or cumulative transaction amounts that can occur before a SCA is required.
Therefore, a better approach is needed. What is it? Preferably, something that uses a single trusted ubiquitous mechanism that goes back to the days when that everyday bank card could be accepted everywhere with the same process. If we could throw away PINs, get rid of confusing limits, introduce strong security to contactless, we would definitely have the opportunity to go back to the standardized approach where we started. Technology can make the next evolution of the bank card the best consumer experience yet ,and keep the phenomenal growth going for the next twenty years.
Evolution of Biometrics
Biometric technology has long been considered the answer to improving customer experience. To be successful, however, the technology needed to evolve beyond the less than satisfactory experiences of the early days. A huge amount of development has happened to biometrics over the last twenty years and it has transitioned from costly, complex iris scanners, reserved for the frequent fliers, to the true mass market fingerprint and face recognition available in almost every smartphone in the market.
This advancement has created a technology that is now used and trusted in our everyday lives. This has also brought usability to a point where its reliability and capability have been proven beyond question. This is surely the perfect time to introduce the very same biometric technology into payment cards.
Development of biometrics in payment cards
The first-ever cards with an embedded fingerprint sensor were presented by Siemens and Infineon in 1998, but only in the past few years have we witnessed multiple issuers and banks testing the technology for small-scale pilots. This year in my opinion is marking a significant milestone on the road to mass adoption of Biometric Payment Cards, as I see all the pieces of the jigsaw finally coming together.
Thanks to the recent breakthrough in semiconductor manufacturing. The ability to put more transistors into a computer chip has enabled the availability of Secure Elements powerful and integrated enough to replace the early generation of Biometric Payment Cards, which were manufactured using multiple active components on the inlay. Gone is the need to include a battery to power those components, the required energy can be harvested from the point-of-sale terminal itself during payment, making the payment card battery-less.
Industrial-wise, it has taken twenty years of development to reach the current maturity level where a manufacturer of payment cards can easily produce Biometric Payment Cards at a CAPEX and cost level unthinkable until this year. Payment schemes have also finalized their Biometric Payment Cards specifications allowing issuers and processors to include innovative cards into their portfolios.
The vast majority (if not all) of all new payment terminals being introduced in the market support contactless transactions. This will make the acceptance of biometric payment cards seamless and truly global. User feedback from early pilots show a unanimous level of support, helped by familiarity with biometric support on smartphones.
Meeting consumer behavior
Even in this era of digital transformation, neo-banks and Nxt-Gen issuers are constantly looking for new products to meet consumer behavior. Whether to increase convenience (something you are versus something you know), guarantee security for all transactions, provide a way to differentiate their offering, or be the card of choice (“top-of-wallet”), the response is the same – there is a desire to invest to advance card payments!
Technology has moved on at such a pace that the capability is now ready, and this latest generation of cards solves the consumer, issuer, and manufacturing challenges to make it the next big thing to happen to the humble bank card.