Confirming payments using biometric technology offers convenience for businesses worldwide. Methods range from fingerprint analysis to signature recognition. But what exactly are biometric payments? And how do they work?
In this article, we’ll explore biometric payments. We will discuss their advantages and potential concerns for businesses and consumers.
You’ll learn about different types of biometric authentication. We’ll also look at the future of biometric payments.
What are Biometric Payments?
Biometric payments let you use parts of your body, like your fingerprint, face, or voice, to buy things. This is safer than using passwords or PINs because it’s very hard for someone to copy these parts of your body. Biometric payments make sure your transactions are safe and fast. This extra security means you can worry less about fraud and have an easier time paying for things.
Biometric Payment Authentication Methods
Biometric authentication for payments is becoming more popular. There are several methods you might experience:
Fingerprint Authentication
Fingerprint authentication is a trendy method that uses the unique patterns on your finger to verify your identity. This method is secure and convenient since your fingerprint is always with you. It’s widely used on mobile devices to unlock and make payments. Apps like Apple Pay and Google Pay use fingerprint scans to make sure only you can approve payments. A 2021 survey found that 72% prefer fingerprint authentication over PIN codes.
Palm Recognition
Palm recognition is another innovative method. It scans the vein patterns in your palm, offering a secure and touch-free way to pay. Amazon One uses this technology in over 200 Whole Foods Market locations, and it’s growing fast. In 2023, the palm recognition market was valued at $903.8 million, and it’s expected to grow to $2.57 billion by 2032.
Facial Recognition
Facial recognition uses the unique features of your face. With the prevalence of front-facing cameras, this method is quite popular. In 2022, Mastercard launched a cool new feature called the Biometric Checkout Program. With this, you can pay by simply smiling at a camera or waving your hand. The facial recognition market was worth $4.95 billion in 2023 and is expected to grow to $10.34 billion by 2030.
Voice Recognition
Voice recognition analyzes your vocal characteristics, such as pitch and tone. It allows for secure transactions through spoken commands. Voice assistants like Apple’s Siri, Google Assistant, and Amazon’s Alexa help make this technology possible. They allow you to make payments just by speaking.
Iris Scans
Iris scans capture the unique patterns in the coloured part of your eye. This method is highly accurate. For example, the Polish fintech company PayEye uses iris biometrics for payments. Recently, Apple launched a new feature called Apple Vision Pro, which includes Optic ID. This cool feature lets you use your eyes to unlock devices and make payments. The iris recognition market was valued at $4 billion in 2022 and is expected to double by 2027.
Behavioural Biometrics
Behavioral biometrics looks at how you act, like how you type or move your mouse. This makes things safer by spotting unusual behavior when you use websites and apps. Companies like BioCatch use behavioural biometrics to help banks prevent fraud.
How Biometric Payment Works: Step by Step Guide
A biometric payment system uses your unique features, like your fingerprint or face, to approve your payment. Here’s a quick overview:
Step 1: Enrollment
First, you register your biometric data, like fingerprints, facial features, voice patterns, or iris scans. The system captures and securely stores this data as a digital template.
Step 2: Security Measures
Biometric systems use various security measures to protect your data. These include encryption, secure storage, anti-fraud techniques, and compliance with data protection regulations like PCI-DSS.
Step 3: Authentication
When you start a payment, the system asks for biometric authentication. You might scan your fingerprint, show your face to a camera, or speak a passphrase. Then, the system compares your biometric sample with the stored template.
Step 4: Matching Process
Next, the system uses algorithms to compare your biometric sample with the stored template. The authentication is successful if a match is within an acceptable range.
Step 5: Decision & Authorization
If the authentication is successful, the system authorizes the transaction. It means you can complete the payment. However, if the authentication fails, the system denies access to prevent unauthorized transactions.
Step 6: Transaction Completion
Finally, once authenticated and authorized, the transaction is completed. Your account is either debited or credited accordingly.
Advantages of Biometric Payments
Biometric payments are becoming popular because they offer many benefits that make them appealing to you:
- Better Security: Biometric authentication uses unique physical traits, like fingerprints or face recognition, making it very secure. Passwords or PINs can be forgotten or stolen, but biometric data is unique to each person.
- Easy and Fast: You don’t have to remember long passwords or carry cards. Instead, you can use a simple touch, scan, or voice command to make a payment. According to the Amex Digital Payments Report, 78% of people use contactless payments for convenience and 54% for speed.
- Less Fraud: Since biometric data is very accurate, it’s tough for fraudsters to pretend to be you. It means businesses can reduce fraud and save money on fixing fraud-related issues.
- Better Experience: Using biometrics is accessible and user-friendly. A survey showed that 68% of people like biometrics for convenience and 67% for ease of use.
- Flexible and Scalable: Biometric payments can be used on many devices like smartphones, tablets, and online platforms. It means businesses can adapt to new technology and your preferences.
- Follow the rules: Biometric payments help businesses follow payment security rules by providing a solid way to confirm your identity. It makes it harder for anyone else to access your card data.
- Contactless and Clean: During the COVID-19 pandemic, contactless payments became more popular. Biometric technology fits well because you don’t have to touch payment terminals, which is cleaner and safer.
- Compatible with Existing POS Infrastructure: Biometric credit or debit cards work with existing payment terminals without any modifications. This means merchants don’t face rollout costs, and the technology can be adopted quickly.
Issues & Concerns With Biometric Payments
While biometric payments offer many benefits, they also come with essential issues and concerns:
- Cost: Implementing biometric technology can be expensive, especially for small businesses. You need to think about the costs for buying sensors and devices. Also, you need to consider the costs for setting them up, keeping them working, updating the software, and training the staff.
- Privacy Concerns: Your biometric data is very personal and unique. It raises privacy and data security issues. Handling your data is essential to prevent unauthorized access and breaches. You should know how your data is used and be able to control its usage.
- Data Theft Risk: If stolen, your biometric data can’t be easily changed like a password. This is risky because stolen biometric info can be used for identity theft.
- Accuracy Problems: Biometric systems are usually accurate but can make mistakes. Things like sensor issues or environmental conditions can cause errors.
- Different Rules: Various biometric systems have their own rules, causing problems with compatibility. This makes it hard to use biometric payments everywhere.
- Following Laws: Biometric systems have to follow special laws to keep your information safe and avoid breaking any rules.
Biometric Payment Future Trends & Statistics
The use of biometric payments is expected to grow a lot in the next few years. Here are some important factors:
- Rapid Growth: From 2024 to 2028, biometric in-store payments will grow by 113.6%. This means that the value of the transaction will increase from $429.1 billion to $1.2 trillion.
- Market Expansion: In 2020, the global market for biometric authentication in banking and finance was worth $762.1 million. By 2026, it’s expected to reach $2.2 billion. It shows how quickly this technology is being adopted.
- User Comfort: Did you know that about 73% of adults in the US aren’t comfortable using Amazon biometric payments? It’s a reminder that while technology grows, people still have concerns.
- Huge Transaction Increase: Juniper Research found that biometric authentication will be used in over $3 trillion worth of payment transactions by 2025. This is a massive increase from $404 billion in 2020.
Choose a Trusted Payment Services Provider
At PaymentSave, your customer’s safety is our top priority when selecting a card machine or POS system.
We offer reliable and secure payment processing solutions. Our services include:
- Simple and affordable payment processing.
- Personalized assistance.
- Advanced payment technology to help your business grow.
Contact our team or read our blog to learn more about what we do and how we can help your business. We’re here to support you!
