Did you ever swipe a piece of chocolate from your parents’ secret stash, and leave incriminating evidence behind with your child-sized fingerprints?
Though doubtful that anyone called the authorities to verify the culprit’s identity — that time — don’t think for a minute that the chocolaty smears couldn’t be identified.
As noted in The Fingerprint Sourcebook from the Swiss Federal Police, fingerprints offer a reliable means of personal identification… just one of several biometric identifiers in use today, and the oldest of the lot.
What makes fingerprints so reliable as a biometric indicator? As our Swiss friends explain, it’s the fact that “no two fingerprints have ever been found alike in many billions of human and automated computer comparisons.”
SearchSecurity experts explain that in addition to fingerprints, other unique biometric identifiers include hand geometry, earlobe geometry, retina and iris patterns, voice waves, DNA, and signatures.
They write, “Biometric verification has advanced considerably with the advent of computerized databases and the digitization of analog data, allowing for almost instantaneous personal identification.”
Given the vast amount of fraudulent activity that ecommerce merchants deal with every day, biometric payments represent the future of the industry.
Reliable and instantaneous customer identification sounds like a great way to fight the bad guys and protect legitimate customers. Let’s take a look.
Biometric Payments in Use Today
Anyone with an IPhone 5S or later, or an IPad of recent vintage, knows about using a fingerprint to unlock and access the tool. While it still feels “out there” to many, the ability to gain and limit access with your fingerprint seems extra secure. After all, no one else can use it but you!
Fingerprint authentication now comes standard with high-end smartphones. Not to be outdone, midrange competitors followed suit. In fact, 60% of smartphones expected to ship by the end of 2017 were anticipated to include fingerprint sensors.
Though Apple Pay led the way with biometric payments for mobile phones, Android Pay and Samsung Pay also employ biometric verification today.
In addition — according to a report from Juniper Research — “The number of mobile payments authenticated by biometrics will rise to nearly $2 billion this year, up from $600 million in 2016.”
As more and more consumers become comfortable with the use of mobile wallets, payWave from Visa, and contactless payments from MasterCard, the use of biometric payments expands every year.
For example, MasterCard rolled out Identity Check Mobile (nicknamed “selfie pay” by the press) recently in 12 European markets.
First trialed in the U.S. and Europe in 2015, and launched in the summer of 2016 in the U.S., Canada, and the U.K., the biometric payments solution replaces less secure passwords with biometric checks for online shopping.
This video features Ajay Bhalla, president of Enterprise Security Solutions at MasterCard, explaining how the solution works. As Mr. Bhalla says, “Everything is wrong with passwords.” People forget them, leading to customer frustration and reduced sales. And passwords are less secure.
What’s the Future of Biometric Payments for Ecommerce?
Biometric payments for ecommerce revolve around using a secure means of authentication. Today’s reliance on passwords will become a relic of the past, though it won’t happen overnight.
Of three primary ways online shoppers “prove” (or authenticate) who they are technologists focus authentication on “inherence” factors (biometrics). Such factors include things that an individual is or does: unique facial features, fingerprints, voice recognition, and shopping behavior.
(For a good run-down of biometrics that could be used for CNP biometric payments — including pros, cons, and examples — check out this post.)
As consumer sentiment shifts in favor of more secure online shopping experiences, the payments space moves away from today’s standard two-factor authentication (2FA). Three-factor authentication (3FA) methods including biometric factors are becoming more acceptable to consumers, though not everyone yet agrees.
John Barco, writing for Infosecurity Magazine says, “Usernames and passwords are not dead just yet. They will continue to have their place online for a while, but what’s increasingly obvious is that in isolation, they are no longer enough to keep sensitive information safe.”
You can read his entire thoughtful exposition on protecting information online here.
While biometric payments may not be the norm yet, the future’s fairly clear.
Merchant Benefits of Biometric Payments
Anything that improves the security of online payment transactions conveys benefits to ecommerce merchants. Online fraud remains rampant, costing merchants an atrocious $2.40 for every $1 in lost revenue, comprising product loss, banking fines, penalties and administrative costs.
Increased security through use of biometric payments reduces fraud, including the euphemistically named “friendly fraud” — sometimes called chargeback fraud — that contributes 50% of fraudulent transactions.
Lower fraud results in fewer chargebacks, especially lower rates of friendly fraud. Just imagine someone trying to dispute an online purchase following biometric authentication… That image should make you smile.
So, while implementation of biometric payments may be some ways off for most online shops, convenient, safe, and secure biometric authentication technology exists today.
Lessen Your Risk for Fraud and Chargebacks with MerchACT
At MerchACT, we get that your ecommerce business keeps you busy, and perhaps you have neither the time nor the bandwidth to keep up with every new technological and industry development, like biometric payments.
In reality, biometric payments solutions still reside “on the cusp” for most ecommerce businesses. But technological solutions in the payments space evolve quickly and it behooves ecommerce merchants to watch this space.
One of the best ways ecommerce merchants thrive in this fast-moving, competitive space — and the ongoing battle against fraud — is by partnering with a payments processor who understands your business, and who wants to see you succeed. They partner with MerchACT.
In addition to ecommerce payment processing services, we leverage industry relationships and payment processing expertise to offer consultative services and guidance tailored to your specific needs.
Far from being a “me too” kind of processor, MerchACT offers decades of payments industry experience and expertise — both domestic and international — along with a stellar industry reputation that sets us apart from competitors. And we do keep up, to help clients like you succeed.
When you become a MerchACT client, we treat you as a business partner to help you be profitable and to grow your business. Because if you’re successful, so are we.
Choose MerchACT, where you’re more than an account number. We’ll both be glad you did.