Biometrics in Consumer Payments: Is the Game Over?

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David True

President and Board Member, NYPAY

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Payments are complicated, and biometrics offer simplicity. And as I’ve argued in the past, simple wins. That is why biometrics are so hot these days—the promise of simplicity in a complicated world. But succeeding with biometric simplicity is not so easy, and latecomers may have missed the boat.

Biometrics are identity, and that is a core need in payment; Dave Birch—whom you should follow if you don’t already– argues that identity is the new money. Identity is central to EMV, but that 20-year old technology is not flowing smoothly into the US, despite the efforts of the payment behemoths

The reasons are many, but one is that, since EMV was created, more people carry mobile phone than carry payment cards. And as more and more of those become smart phones, if becomes possible to know not only the identity of a card (what EMV provides) but also the identity of the consumer (what biometrics offer). And that can solve for the fraud problem much better than EMV.

The idea is strong, and with it the lure. Solve for identity and fraud falls away. Carried along for the ride, and too often unnoticed, is the baggage of execution.As we so often see in payments, the sexiness of a tech-driven can it blind us to what is needed for success.

But execution is everything, and in payments execution means meeting the needs of many: banks, merchants, and consumers. And if you can keep the payment networks happy everything is much easier.

One place to start is a common platform—that is what the magstripe card offered, and that worked pretty well. But a common standard is far away in biometrics.

Today there are many types: as Minority Report fans know, there is eyeball scanning; there is fingerprint recognition, which Apple Pay has popularized, and a variation that works on veins in the finger rather than fingerprints; there is heartbeat recognition, which links to all the buzz about wearable technology. And one part of the Amazon behemoth has patented a method for “ear recognition” technology. There are—and will be—more. All are jockeying for position.

Another need is trust: if you’re going to provide more intimate personal information to make a payment you have to be quite comfortable with whoever is gathering that information.

The “creep out factor” makes this hard. As Zack Martin noted in earlier this year in Secure Payments News, writing about comments on a WSJ biometrics article:

Yes, passwords are miserable authenticators but suggesting people swallow something that is used for identification is not the answer. There are a great number of people out there who think these advanced ID technologies are not the answer and some truly believe that they are the anti-Christ.

A bit extreme, but keep in mind Zack is referring to comments on a Wall Street Journal article. For those inclined to this way of thinking, any government-led biometric system is tainted. And the US government has little appetite for trying this—think how little they have been involved in EMV.

So where does it leave us in biometrics for consumer payments? Reflect on where we are now. Apple, a company with high consumer trust and a passion for simplicity, launched Apple Pay, making use of fingerprint recognition and supported by massive publicity. And they integrated with existing players.All the right elements.

Other seems to be following their lead, with fingerprint recognition. Has the standard been set?

I’d lay better then even odds that it has. Meaning that all the stuff we insiders read about biometrics will, in the realm of consumer payments, remain just stuff we insiders read.

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