How biometrics could impact the future of payments

02.02.2022
CCS payment card
CCS payment card
CCS payment card

Consumers have come to love the convenience – and lately, hygiene – that comes with contactless payments. After the pandemic subsides, 86% of consumers have indicated a preference to continue making contactless payments. Global contactless transaction values were forecast to reach $2.5 trillion by the end of 2021 alone.

 

However, contactless payments, like every type of transaction, are not completely free of risk. A lost or stolen card can potentially be used for multiple ‘small-value’ transactions in a short space of time, without requiring user authentication. Many nations continue to increase contactless limits, making higher-value payments more convenient for consumers, yet raising the potential for larger losses if cards are lost or stolen.

Payment solution providers need to balance the convenience of contactless with the need to deliver security layers that build trust. The next generation of contactless cards therefore need options that deliver high security and convenience. One answer could lie in the combination of biometrics and a security chip within the payment card.

Smarter, more personal authentication

Biometric authentication is becoming more prevalent in our daily lives. Just look at smartphones, where 80% of devices now include fingerprint sensors. Infineon products allow to combine security and convenience to the payment card.

The convenience and overall ‘cool factor’ of biometric payment cards means there is already a strong consumer appetite for them. A recent survey reveals that half of consumers want a biometric payment card and would be willing to switch banks for one, while 43% would pay extra to get one.

Biometric payment cards are still young, but are on a journey towards mass market adoption, with four commercial launches and 23 pilots currently in place globally, and the payments value chain is starting to realise the benefits:

• For consumers: Using a fingerprint for contactless payment only on the own payment card enables consumers to use convenient, hygienic authentication for their transaction. This could encourage banks to raise contactless limits further if consumer trust leads to increased demand for higher-value contactless payments. 

• For issuing banks: Offering biometric payment cards shows that banks are working to continually enhance the customer experience. If customers respond well to the new technology, biometric payment cards could become ‘top of wallet’ (i.e. their preferred card), enhancing brand value for the bank.

• For retailers: Contactless biometric cards can provide fast and well-secured transactions while reducing the burden of handling cash. Also, thanks to global payments standards, accepting biometrics tends to bring no additional infrastructure costs, as the technology works on existing contactless PoS terminals.

Rethinking card technology

Biometric payment cards require several advanced technical components to come together to make them a reality. Until recently, this has threatened commercial viability and created a potential barrier to mass market adoption. Infineon’s work is focused on removing these barriers, while supporting usability and security features.

Biometric Payment
Biometric Payment
Biometric Payment

The main challenge is in simplifying how a payment card is physically made, while putting additional functionalities into the semi-conductor – in other words bringing the Secure Element, microcontroller and power units together as one security device. Enabling this to scale across the world’s 3.5 billion payment cards will help bring the technology to everyone’s wallets.

Biometric cards need much more power than traditional cards to perform calculations to ‘extract’ and ‘match’ fingerprint data that authenticates the user. This data is comparatively large and yet the transaction must still happen incredibly quickly to maintain the user experience.

Biometric data is also extremely valuable and unlike a PIN or password cannot be replaced or repaired if compromised. It is therefore important to limit the transfer of biometric data in order to reduce the level of risk in a transaction.

Thanks to advances in technology, it is now possible to perform extraction and matching in the security chip on the card, rather than in the payment network. This is the most professional way to handle sensitive biometric data. In addition, this process also helps to contribute to a typical latency (the time it takes to complete both the biometric authentication and the payment transaction) of less than 1 second. Enabling seamless transactions is an essential part of any new payment technology.

Turning future visions into reality

Payment Credit Card
Payment Credit Card
Payment Credit Card

The work we are doing on the latest generation of biometric payment cards is designed to reduce the complexities within the card and enable scalable production. These cards can collect power from the terminal/reader and use it to power the fingerprint sensor, memory and computing units.

As well as improving card performance, the other major benefit of our work to closely integrate the fingerprint sensor, Secure Element, power management and communications is that it reduces manufacturing complexity.

This is a significant development that will enable biometric cards to be made at scale, allowing easier integration into existing hot lamination card manufacturing processes. By enabling card manufacturers to produce biometric cards much the same way as they produce current PIN-secured cards, we reduce the investment required to produce them and drastically boost their scalability.

The future of payments enables fast and highly convenient transactions around the world.
Hidden complexities in the cards will power payments simpler than ever to use, putting the world of commerce at your fingertips.

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Wolfgang Schindler
Wolfgang Schindler
Wolfgang Schindler

Author: Wolfgang Schindler, Head of Application and Product Marketing, Payment Solutions at Infineon

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