Would you want a Biometric Credit Card?

Biometric scanning has become increasingly common in day-to-day life as technology progresses. Each day millions of people open their phones via facial scanner or fingerprint. Similarly, in the health care industry, government, and travel; biometric scans are also considered normal.

People entrust biometric scans to guarantee safety in various fields, but why not within the financial sector?

The added security could be helpful in an industry with many predatory data issues. In the United States alone,?there were nearly 400,000 cases of credit card fraud. Also from 2019~2020 credit card fraud increased by over 30%. In a world with financial crimes on the rise, it is essential to find more ways to protect your money and biometric screening could be one of them.

Currently, the main protections on a customer’s credit card is their pin-number and or accessing real information on their online account. Unlike, alternative payment methods such as e-wallets which have already offered some biometric features.

A popular example is, Samsung Pay which has enabled an iris scanner to determine refer that the phone holder is making the purchase. Another example of payments which already adopted biometrics is within a less is cryptocurrency. Cryptocurrency has actually had biometric wallets readily available for quite some time. So why hasn't credit cards adopted this security? It could be due to cost.

Biometric security measures require hardware. For instance, a popular hardware wallet to store bitcoin is?D’Cent; which was founded in 2019. The wallet can hold hundreds of currencies with its biometric scanning hardware.

Which sounds great and all, but the wallet is a whopping $139 USD. Naturally, this hardware has become popularized due its security features, but if they are this expensive, many credit card consumers wont want to pay such a premium. Or would they?

Would biometric cards become popular if introduced?

Before any new products begin, surveys are always taken to check for demand. So, are people ready for a biometric credit card? The answer is yes.

• 80+% U.S. cardholders are seriously concerned about identity theft and 67% said they wouldn’t mind paying with a biometric card
• 70%?believe that biometrics are easier than using passwords or PINs.
• According to a?Visa Survey: 86% were interested in using biometrics for verification
• Fingerprint recognition ranked amongst the highest (50%) in terms of desired payment authentication for in-store usage
• We can see that the market leader demographically will be in the APAC region

Though they are not popularized, are the cards available?

To respond to the new market, both Visa and Mastercard began their?biometric card programs; as well as smaller companies such as F.Code, Fudan Microelectronics, and IDEX Biometrics. But none of them are popular.

Their cards would require only initial setup for the biometric ID, and then after can be used anywhere such as in stores or ATMs. In other words, there will be no need for hardware or software upgrades with the new card.

Then, due to the fact that security is the main benefit of the card, the companies have taken steps to enhance security even further. In this case a pin-code backup or signature will be possible in case of finger print errors which will be set by the bank. Creating two potential layers of security. Also preventing anger if there is an instance the biometric system doesn't work.

So how does the checkout process go?

At brick-and-mortar stores, utilizing the card is not much different than the current chip reading system. Instead of placing the chip inside the system or tapping. Instead, the user would hold their designated finger on the finger spot. While at the same time the chip reader touches the contactless payment spot. Then the reader will recognize the card and will validate the fingerprint. On the Mastercard system, up to four fingers can be added (in case say one finger is unreadable or there is an error).

Data

The main concern users have is where the fingerprint will be stored. Public concerns over fingerprint storage is not a new phenomenon. Concerns popped up for the first time when Apple first came out with its touch ID in 2013. Though from the technology seen so far; the cards will process prints similar to mobile phones. Yet, customers fear that their fingerprint data is now being stored with a private firm.

With current chip technology, the actual ID is not stored to Visa or Mastercard. Rather there is a numerical representation (0’s and 1’s) that is assigned to the fingerprint. This fingerprint template is what is actually stored on the chip?and the owner’s data never leaves the card. In this case, even if the fingerprint data was somehow extracted from the payment card, it cannot be used without the encryption key to unlock the biometric certificate.?Preventing hackers to find the information if the card is lost. Similarly, this information is not sent over to the actual bank network or to any federal agency. Which could help calm consumers down and switch over to biometric cards.

Price

Like we said earlier, there is a price to security. These cards are as expected, typically more expensive to purchase than the average card. Some biometric card companies will charge up to $20 per card; while a regular credit card is only $1-2. That is still a massive increase, though not as bad as the user case of cryptocurrency. Though; to make up for these claims card companies state that since it is a contactless form of payment, they will have generally less wear and tear than the average card. Such time of usage could potentially even out some of the opportunity cost to customers, however it will still feel expensive to some consumers. Though this does cause a likeliness of more wealthy consumers turning to this card first as they wont be as price sensitive and could slow down the popularity of biometric cards if the price doesn't decrease.

Are the few users that have these cards enjoying the benefits?

Beyond security, those that have the cards so far are seeing faster transaction speeds. This is because?biometric card technology reduces friction.?Users don’t have to worry about inputting a pin every single time they make a purchase. Reducing overall transaction speeds. A study conducted by Visa in 2018 found that using a biometric credit card reduced transaction time by 77% compared to traditional chip-and-PIN cards. The study was conducted with 20 participants, and the average time to complete a transaction with a biometric credit card was 9.5 seconds, while the average time for traditional cards was 40.5 seconds. Generally, faster = happier when it comes to payments, so this benefit will help expand this type of card.

Would you get one of these cards?

The introduction to biometric cards is amongst one of the newest inventions in the credit card field and could continue to develop. The high security and simple processes will help keep the credit card industry alive against upcoming alternative payment methods. Though, there is some problems preventing these cards from taking off.

Visa and Mastercard both have these credit cards available through trial and are now in the process with partnering with banks. Visa has partnered with Mountain America Credit Union and Bank of Cyprus. While Mastercard is partnering with Samsung Electronics, Jordan Kuwait Bank, etc. In other words, the technology and the cards are available; though they’re not popularized yet until more banks and companies accept the new system. Would you want to use a biometric card? Comment below your thoughts.