Biometric payments are ready for prime time
Although biometric technologies have undeniably made their way into our daily lives in recent years and are now widely praised especially by younger consumers, the technology has yet to fulfill its potential. Widespread consumer acceptance will on the one hand depend on the democratization of biometrics by making the technology more familiar to all generations, and on the other, overcoming consumer reluctance that can stem from a perception of intrusiveness, required effort or accuracy of the system.
Nevertheless, existing identity verification systems can be a hassle for many consumers when shopping online. A recent study conducted by Visa revealed that nearly half of the consumers surveyed had already abandoned an online purchase because they could not remember their password. Biometric payments can help to tackle this issue by providing a user-friendly, fast, and convenient experience to the end consumer, resulting in a significant drop of the abandonment rate at check-out.
Belgium and Luxembourg are jumping on the biometrics train
The Belgian market is ready to dive into the new era of biometric payments. A recent study shows that 35% of Belgians are willing to use a means of payment relying on biometric technology when purchasing goods in store, and the number increases to 39% when it comes online purchase.
To address this trend, in 2017 Mastercard launched an application in several markets, including Belgium, which relies on biometric authentication to verify the cardholder’s identity at the checkout of an online purchase, making consumers’ payment experience faster, safer, and easier.
In Luxembourg, a use case of payments applied to biometrics is already live in one of the country’s leading banks. Since 2017, the Wealth Management entity of the bank has introduced a new service that allows its customers to log into their web banking and perform transactions using biometric authentication features such as fingerprint, voice and facial recognition. This digital offering addresses the growing appetite of customers to be offered innovative and connected solutions.
Favorable legal framework for biometric payments
The revised Payment Service Directive (PSD2), which entered into force in January 2018 in the European Union, is paving the way for a widespread adoption of biometric payments.
To comply with the new Regulatory Technical Standards (RTS) required by PSD2, market players are obliged to ensure enhanced security for consumers when they make online payments or transactions. To do so, the RTS require the use of Strong Customer Authentication (SCA), meaning that to prove their identity when accessing their payments accounts or making online payments, customers will need to provide at least two out of three of the following elements:
· Something the customer knows (PIN code, login, password...)
· Something the customer owns (mobile phone, token...)
· Something the customer is (biometrics)
Meanwhile, the Global Data Protection Regulation (GDPR), applicable in the European Union since May 2018, is also playing a key role in shaping the further spread of biometric payments. The introduction of the regulation has increased the need for clarity in the use of personal data, including biometric data. As GDPR aims to protect individuals from having their private information shared with third parties without their consent, Payment Service Providers (PSPs) will also need to address this challenge when implementing biometrics technology.
How Accenture can help PSPs on their biometrics journey
At Accenture Belgium and Luxembourg, we strongly believe that biometric technology will shape the future of payments. Because the implementation of biometric systems is now easier, PSPs will need to leverage this opportunity if they want to stay ahead of the competition by offering both convenient and secure means of payments. Accenture’s team of experts in Payments, Security and UX support clients from the design of the strategy to the implementation of the right biometric solution tailored to their business.