Payments have been the major driving force for the wide-scale adoption of biometrics in the consumer market. Today, millions of customers (Goode Intelligence forecast 350 million plus during 2015) are using biometrics on a daily basis around the world to provide secure convenient user authentication and transaction authorisation and this theme is set to continue with a forecast of over three billion users by 2020.
Biometrics for payments is increasingly a vital part of a payment service providers’ toolkit in the never-ending task of reducing financial fraud and ensuring that their customers can conveniently prove their identity and authorise transactions.
The adoption of biometrics for payments is also leading to wide-scale disruption in the payment industry, enabling alternative methods for consumers to pay for goods and services in a variety of payment scenarios. This is not simple replacing one authentication mechanism with another; the finger replacing the PIN. Biometrics is allowing alternative payment methods to be introduced, some of which are being supplied by non-traditional payment service providers.
HYPR Corp has developed a biometric security protocol that provides digital payment platforms, including Bitcoin, with a solution to secure access to their digital payment assets.
One of the core security concerns around Bitcoin and other digital currency platforms is that unlike with credit cards, transactions are irreversible.
HYPR was founded to solve the core fraud problem by providing a definitive answer to the question of “Am I who I say I am?”
HYPR answers the question of “Am I who I say I am?” through a three-factor authentication protocol that creates a biometric authentication bridge between the user and their mobile wallet. The cryptographic algorithm that HYPR uses is the same as the digital signature algorithm that the Bitcoin protocol uses. Because of this similarity, future iterations of the HYPR biometric security platform could be used to biometrically validate Bitcoin transactions.
Another company looking to secure Bitcoin transactions is Nymi with their heartbeat-enabled wearable band. The Nymi band can be used to store a users Bitcoin in a native biometric wallet with the private key tied to a unique ECG biometric signature. I recently demoed the capabilities of the Nymi band at a presentation I gave on the future of biometrics for wearables at the Biometrics 2015 conference in London. I even use the Nymi band to log me into my office computer and have been impressed at how natural it feels to allow me access to my computer.
It is also enabling new ways in which consumers can use traditional payment methods, even cash (still the preferred payment type for many people). Hoyos Labs has developed a smartphone-based biometric authentication solution that aims to reduce the increasing amount of fraud at the ATM, negating the problem of bank card skimming. Their 1U ATM product is a software platform that allows bank customers to access their accounts via ATMs using biometrics on smartphones. There is no need for cards or for the customer to enter in a PIN at the ATM as the entire authentication occurs on the customer’s smartphone.
The Hoyos Labs solution is compatible with existing ATM platforms and does not need any hardware to be installed on the ATMs.
These are just three examples of how the latest biometric solutions are protecting payments and enabling alternative ways in which we can pay for a wide range of goods and services in a variety of payment scenarios; from Bitcoin to the humble bank note
I explore many more examples of biometric payments, including the rise of the mobile wallet, in an analyst report recently published by Goode Intelligence; "Biometrics for Payments; Payment Security Gets Personal".