The market for biometric payment cards is very much in its infancy. The latest research from IHS Markit projects that world shipments will increase nearly 130-fold in four years, from 1.2 million in 2017 to around 155 million shipments in 2021. Over the next five years, the increased security features and social welfare benefits will be the primary factors influencing growth for biometric payment cards.
Increased security comes at a cost
- IHS Markit believes biometric payment cards are high-end products compared with the Europay, MasterCard and Visa (EMV) payment card. These biometric payment cards incorporate a fingerprint sensor within the card and are likely to be more expensive than traditional EMV cards. The biometric card is predominantly targeted at individuals who are willing to pay the extra cost in order to gain increased security.
Biometrics used in social welfare benefits
- Another use case for biometric payment cards could be for people receiving social welfare benefits from governments. Today, there is a high risk of fraud within this sector, and some people give their cards to other people with their PIN numbers and receive benefits even when they are not even present in the country. Biometric payment cards would help reduce this fraud.
Recent case studies
- In April 2017, MasterCard unveiled a next-generation biometric card, combining chip technology with fingerprints to verify, conveniently and safely, a cardholder’s identity for in-store purchases. South Africa is the first market to test the evolved technology, where two separate trials recently concluded with Pick n Pay, a leading supermarket retailer, and Absa Bank, a subsidiary of Barclays Africa. The new card builds on fingerprint scanning technology used for mobile payments today and can be used at EMV terminals worldwide.
- At the time of writing, Visa and American Express had not trialed biometric payment cards. These companies are focusing on using biometric authentication in mobile handsets. However, there are a number of other companies that are currently involved in the development of fingerprint-enabled payment cards including (Card Tech, Card Lab, CrucialTec, Fingerprint Cards AB, Gemalto, IDEX, Innolux, KONA I, KSID, MeReal Biometrics Limited, Morix, Next Biometrics, Oberthur Technologies and Precise Biometrics).
Traditional EMV cards will still be here for years to come
- The traditional EMV card will not be immediately replaced by biometric payment cards. Traditional EMV cards will continue to account for 3.4 billion card shipments (or 95.5% of the total) in 2021.
Advantages of biometric payment cards
- One of the main benefits of integrating a fingerprint sensor into a payment card is that it increases security by verifying the identity of the cardholder. The rightful owner of the payment card must place one of their fingers (normally the thumb) over the fingerprint sensor and - at the same time or immediately after a positive authentication - use the card with the reader. This represents higher security levels compared with those currently on the market.
- There is no need to replace or update existing reader infrastructure (point of sale or desktop readers, etc.) because the entire identification and authentication process is performed on the card.
Disadvantages of biometric payment cards
- The cost of adding fingerprint sensors to payment cards makes them more expensive than those shipped now. This cost will either be passed onto customers or banks, which will have to pay for this additional feature.
- The personalization process likely will be more complex with biometric payment cards because of the advanced internal electronics. For instance, this family of cards cannot be embossed [such as credit card numbers raised above the surface of the card], instead direct-to-card printing, retransfer printing, inkjet or laser engraving thermal transfer should be used for their personalization. For financial cards, the rear indent of CVV/CVC should be feasible if no critical elements are present below the marking area.
- The enrollment process is more arduous for consumers, which will be a barrier for mass adoption. A cardholder must enroll their card by registering with their financial institution. Upon registration, their fingerprint is converted into an encrypted digital template that is stored on the card.
- Compared to using a cellular handset with fingerprint authentication for payments, some people would say that having fingerprint biometrics on a payments card appears to be a more dated technology. Fingerprint authentication on a mobile looks more in vogue than fingerprint authentication on a payment card.