Biometrics once fell within the realm of science fiction—part of futuristic security systems featured in summer blockbuster films—but today they are being used in a growing number of everyday financial services use cases. Whether accessing a mobile wallet using a fingerprint scan or authenticating a transaction using facial recognition consumers are experiencing in real time the security and convenience that biometrics can bring to the payments ecosystem.
Biometric authentication is seeing rapid growth and shows great promise across a wide variety of financial applications. Juniper Research expects that biometrics will be used for more than 18 billion transactions by 2021, growing at a compound annual growth rate of 83.7% from 2016 levels.1 And, the value of biometrically-verified smartphone payment transactions across the globe is expected to exceed $210 billion in 2021.
In an era when all stakeholders in the ecosystem are rightly focused on payment security and risk management, biometrics stand to play a critical role. Biometric technologies offer payment system participants tangible benefits such as greater convenience and enhanced security, particularly when used as part of a layered, risk-based security strategy.
Visa engaged Promontory Financial Group, an IBM Company, to develop a research-based report examining the key drivers behind the increased adoption of biometric technologies, the benefits of biometric authentication in payments, risk mitigation actions, and issues that will require further attention by payment system stakeholders. Promontory’s report finds that the outlook for biometric authentication in payments is positive and sets out five guiding principles to assist in the consideration of the important role of biometrics in the future of payments.
- Foster Stakeholder Dialogue and Engagement: By engaging with a variety of payment system participants, policymakers can deepen their understanding of technology trends, stakeholder perspectives, and potential congruence with policy objectives.
- Support Industry Driven Standards and Interoperability: By supporting interoperability and industry-led, principles-based standards not tied to a specific technology, policymakers can help establish a lasting framework that can keep pace with both innovation and changing risks in the payments landscape.
- Reframe Security Discussions to Reflect New Technology Developments: Policymaker guidance that reflects technology developments and evolving security strategies can strengthen payment system security, allowing ecosystem participants to leverage innovative solutions and approaches to mitigate risk.
- Provide Legal Clarity for Payment System Participants: By engaging in multi-stakeholder discussions on legal issues related to biometric authentication – such as data storage, usage and transmission – before the passage of legal measures, policymakers can help build consensus around governance objectives, including assessing whether non-legislative responses such as industry standards may be sufficient.
- Lead by Example: Policymakers and governments can send a positive message to consumers and businesses alike by embracing biometric technology in their own products and services, as appropriate in their market.
The report is based on market research and interviews with industry experts, academics, and other key stakeholders, on topics including standardization, security, privacy and innovation.
Policymakers play a critical role in cultivating an environment that supports payment system innovations, not only in the area of biometric authentication, but also across the range of authentication and security solutions being developed and tested by ecosystem participants across markets. The guiding principles outlined in Promontory’s report can help promote further innovation in biometric authentication technologies, bringing the benefits of enhanced security and convenience to consumers and businesses alike.
Access the full report and report summary for more information.
1 Juniper Research, “Mobile Biometrics: Consumer Markets, Opportunities & Forecasts 2016- 2021.” December 2016.
