Cash was once the king of payments. But the rise of plastic—credit and debit cards—eventually cut short its reign. And soon, with biometric wallets and frictionless payments, a new kind of transaction is poised to take over. For instance, fingerprint payments are used in AV Supermarket stores in Russia. In India, Aadhar Pay and Axis Bank utilize the country’s National ID System to facilitate in-store transactions. China takes it a notch higher with the use of Alipay’s Smile to Pay facial recognition system. And in the U.S., mobile wallets by Apple, Google, and Samsung have gained traction as a form of frictionless payment.
With convenience literally at your fingertips, payments made through fingerprint and facial scans have been leapfrogging other digital and cashless modes of payments. Security is the primary motivation. Transactions made through biometric wallets are seen as safer since biometrics act as an added layer of identification and authentication. Also, as financial inclusion is still a challenge in most countries, biometric wallets and frictionless payment systems can help address this issue. With this technology, consumers with physical and reading disability can participate in the economic process. As the world moves towards digitalization, widespread adoption of biometric wallets and frictionless payments is inevitable.
The Merits of Biometric Wallets and Frictionless Payments
Without a doubt, consumers are responding positively to biometric wallets and frictionless payments. With these ongoing trends, users of biometric technology are projected to reach 1.2 billion people by the year 2020. Here are the main drivers for the accelerated adoption:
- Biometric wallets and frictionless payments are fast and efficient. PIN and passwords can take a while and cause cognitive stress to consumers. On the other hand, fingerprint and digital wallet scans happen almost instantly, saving consumers from long lines at checkout counters. Amazon Go Stores is an example of how frictionless payments can improve customer experience. With the use of a combination of cameras and sensors, all items within the store are tracked. Items that go into the shopping bag are automatically charged against the customer’s Amazon account.
- With the increase in fraudulent activities and data breach, the consumers’ need for security and safety is a top priority. Through biometric technology, businesses will have the capability to answer the consumers’ pressing security needs. Just recently, Netherlands-based digital security company Gemalto partnered with U.K. bank Natwest. The partnership is testing a debit card with a built-in fingerprint scanner.
- Thanks to fintech, previously underserved and excluded customers can now have access to financial services. A lot of people, especially in developing economies, are still underbanked due to inability to provide proper identification documents. With the use of biometric wallets and frictionless payments, every sector of society can participate in financial and economic activities. Indeed, with the help of digital and biometrics technology, financial inclusion can be achieved.
Ongoing Challenges and Developments in Biometrics Technology
As in the case of every new technology, biometric wallets and frictionless payments are not impervious to risks. Depending on the modality, this technology has a variety of challenges and areas for improvement. Fingerprint scanning has been used by law enforcers to identify individuals with criminal records. This case makes some consumers hesitant in sharing fingerprint data. On the other end, since facial and voice recognition are, factually, exposed biometric modes, they may be prone to data privacy and spoofing issues. Cost of implementation is also another challenge. Iris and retina scans have been proven to have high accuracy and more secure, but the setup and maintenance cost can be exorbitant.
Fortunately, the emerging trends in biometric technology and identity management are moving towards the resolution of these challenges. Anti-spoofing mechanisms are thusly incorporated in biometric devices. Moreover, new biometric values are being developed. Soon, the shape of one’s ear, a person’s scent, and even the way a person walks may be used as a form of authentication and identification.
Looking Into the Future of Money
As businesses integrate biometric technologies in their systems and as the said technology becomes more ubiquitous, the adoption of the technology is intensified. With a payment system that is fast, more efficient, secure and more inclusive, more consumers can participate in economic activities. Biometric wallets and frictionless payments are still in their infancy, but they certainly are the inevitable future of money.