Biometric payments are already here, but are we ready for them?
APRIL 2021 Feature / Text by Tim Hornyak
APRIL 2021 Feature / Text by Tim Hornyak
Going beyond cashless
Biometric technology is based on recognising unique physical traits such as fingerprints. One benefit is that it obviates the need for passwords or PINs. It’s also fast and hard to fool. But that doesn’t mean biometric information is totally secure. In 2019, Israeli researchers said fingerprints for over a million people, as well as facial recognition information and unencrypted passwords, were found on a publicly accessible database associated with Biostar 2, a web-based system that can unlock warehouses, office buildings, and other facilities.
Biometrics is nothing new, with roots in 19th-century criminal science. But, despite recent privacy concerns, it’s been increasingly deployed in IT-driven consumer-facing applications, and one of the most important is payments. Since Apple introduced TouchID fingerprint authentication with the iPhone 5S in 2013, the number of options for authenticating identity and paying via smartphone for goods and services has exploded.
In Japan — a traditionally cash-loving society, but an early adopter of e-money cards — cashless payments hit 26.8% of household consumption spending in 2019, up from 20% in 2016 and a record high. But this figure is far below that of countries such as Sweden, where the cash proportion of payments has fallen below 10%. Meanwhile, analysts at eMarketer expect that, by 2023, a quarter of Japan’s population will be making proximity mobile payments, which refer to on-the-spot transactions made with mobile devices.
French aerospace firm Thales is one company that’s trying to change payments in Japan and elsewhere. Its Gemalto biometric payment card has a fingerprint sensor to activate the card and stores biometric data locally, meaning it can’t be stolen from a server. Users can say goodbye to PINs while benefitting from speedy contactless payment — a plus during the coronavirus pandemic — and the ability to pay above the maximum limit of conventional contactless cards.
Thales has done pilot projects for contactless fingerprint payments in nine countries, and it says more than 80% of participants are satisfied. Banks in Cyprus, Italy, and Lebanon have rolled out the cards, and others in the UK, France, and Switzerland are planning to follow. In Japan — where Thales provides cybersecurity, defence, and transport solutions — the company is introducing biometrics in corporate ID badges and expects to see demand for biometric payments grow, as well.
“Our uniqueness is a constant innovation effort, working in advance with customers and payment schemes to be able to meet high expectations from the market,” says Cyrille Dupont, CEO of Thales Japan. “Thales’s biometric card has been the first one to be certified by Visa and Mastercard for commercial rollout, proving Thales’s undisputed innovation skills.”
Pay with a glance
Since Apple launched FaceID in 2017, facial recognition has gone mainstream. It is being used as an authentication technology — in a world first, Singapore’s national ID programme will add facial verification this year — and as a payment tool. In a partnership with Visa and Sberbank, X5 Retail Group, Russia’s biggest food retailer, introduced a payment system where shoppers can purchase goods at supermarkets and convenience stores by looking at 3D cameras at self-service checkouts. The payment option is only available to Sberbank customers, but X5 plans to expand the service to some 3,000 stores by the end of 2021.
“This is a fast, convenient, and secure technology of the future, and we are among the first to be introducing it in Russia and worldwide,” Kirill Tsaryov, Sberbank deputy chairman, said in a release. “I’m convinced that contactless biometric payment solutions will very soon be used universally.”
The technology is also making inroads into Japan as the appeal of cash slowly wanes. Tokyo payment service provider VeriTrans, part of Digital Garage, has teamed up with IT giant NEC to conduct pay-by-face proof-of-concept trials in Tokyo, Toyama, and Shizuoka prefectures. NEC is also trialling its Bio-IDiom biometrics technology, a platform for finger, palm, voice, and other forms of identification, in an experiment in Tochigi Prefecture. Participants who register their photo and payment details through a local shopping promotion app can receive discounts when they pay for goods and services using this technology.
“Trials and services using NEC’s biometric payment solutions are already improving convenience and efficiency for businesses that include retail stores, restaurants, hotels, and more,” says an NEC spokesperson. “These services feature authentication technologies that have been recognised as the world’s number one in benchmark tests for identification technologies conducted by the US National Institute of Standards and Technology. Overall, NEC has implemented more than 1,000 biometric authentication systems in approximately 70 countries and regions around the world. These systems are becoming an important part of social infrastructure that support the health, safety, and security of daily life.”
Face-recognition technology, however, comes with privacy hazards. Privacy watchdogs warn that information can be employed to track people via security cameras and social media posts. That’s how US government officials have been identifying people in the mob that invaded the Capitol in January.
In Japan, police have been using the tech to match such imagery to photos of people who have been previously arrested, as well as suspects who haven’t been arrested; the National Police Agency has some 10 million images in its database, according to a Kyodo report. The European Commission, meanwhile, has been considering a ban on facial recognition in public areas.
“We need to listen less to private companies, who of course have an interest in no strong regulation, and listen to the people who are affected,” Ella Jakubowska, a policy and campaigns officer at advocacy group European Digital Rights, told Politico last year. “Because there’s always somebody who watches, and somebody who is being watched.” •