Will biometrics propel mobile payments forward?

Thursday 29 August 2013 | 15:26 CET | Background

According to a recent Frost&Sullivan statement, biometrics can lead to more security on mobile phones, thereby enhancing for example the mobile payment process.

Research firm Frost&Sullivan recently issued a press release about the possible value of biometrics for mobile payments. According to Frost&Sullivan biometrics can make mobile payments more secure, one of the issues that mobile payments companies still face when trying to persuade people to abandon their payment cards or cash in favour of paying via one’s mobile phone.

Frost&Sullivan’s Global Program Director ICT in Financial Services, Jean-Noel Georges, said that: “Protecting the mobile device itself is a first step, necessary to secure mobile payments. Although a personal identification number (PIN) can do the job, in 2011 more than 60 percent of smartphone users were not using a PIN to protect their mobile access… The time is now right for biometric technology to emerge as a secure solution for mobile applications that require high levels of security, particularly payment."

Various projects are already taking place to use biometrics for security with mobile usage, including mobile payments.

MOBIO (Mobile Biometry) is a European Funded project, which focuses on multiple aspects of biometric authentication (ranging from research to development and scalability) based on face and voice authentication. They focus on face and voice authentication as more and more portable devices are equipped with a microphone and a video camera, while very few devices are equipped with fingerprint or iris scanners. The MOBIO project has developed an authentication method for a mobile wallet. The level of security through biometric authentication increases with the amount of the transaction: no authentication for a soda, face authentication for a 40-Euros purchase, face and voice authentications for a cash withdrawal or a purchase above 100 Euros.

Commercial companies are also looking into adding this extra level of security via biometrics. Verifone for example has launched a service with Digicel Pacific for international mobile money transfer based on biometric security. In stores in New Zealand biometric enabled payment systems were installed. The new system enables customers sending money home to register just once and record their fingerprint as permanent identification within the Digicel system. From that point on, existing customers simply scan their fingerprint at the VeriFone terminal to retrieve their details and make a new transaction - even if they registered at another store.  Regulators in New Zealand require that photo ID is recorded each time an international money transfer is made in order to satisfy Know Your Customer (KYC) requirements.  The new fingerprint technology avoids the need for customers to provide identification each time they transact which means no forms to fill in and less time spent at the counter. Although this launch may have been triggered more by the need to make it easier to comply with a current law, it is likely to make consumers more accustomed with biometric security.

Earlier this year Point-of-Sale terminal maker Ingenico introduced a new range of mobile payment terminals which included NFC and biometric verification. The devices are aimed at governments and financial institutions in low-income countries. The biometric element allows for identifying large parts of the population who have no ID cards and/or no bank accounts.

With the current rumours that Apple is incorporating a fingerprint sensor in the next iPhone update, as well as the continuing speculation that Apple’s Passbook is its very first step into mobile payments, by combining the two with the millions of iTunes account holders, Apple could that way indeed make a wave into the mobile payments field. However, even without Apple, the possibilities of biometrics as an authentication measure for mobile payments could alleviate some of the security issues many consumers currently have with mobile payments.

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