2. Regulations Increasingly Require Multifactor Authentication
While biometrics are often a preferred single point of authentication due to the difficulty of faking them, they are also useful as a quick, readily available second factor in multifactor authentication (MFA) environments. In some markets, emerging regulations (such as the European Union’s revised Payments Services Directive) require two-factor authentication, forcing financial institutions to enable forms of authentication other than personal identification numbers. “Europe’s open banking framework requires so-called strong customer authentication for banks to share customer data with other providers, with biometrics one of the options,” notes Toolbox.
3. Frictionless Payments Allow Shoppers to Ditch Cash
The use of cash, FindBiometrics reports, “continues to evaporate,” creating a danger for shoppers, whose card-based transactions are a prime target for fraudsters. Fingerprint-scanning payment cards are shaping up to be one of the biggest near-term trends in the payments industry, with institutions working with experts to develop market-ready solutions that may be deployed on a significant scale as soon as 2020, the publication adds.
4. Naked Payments Become Most Convenient of All
Less scandalous than the name implies (but perhaps just as exciting), “naked” payments are those that don’t require a card — or even a mobile payment app — at all. Instead, a user’s credit or debit account could be linked to their biometric information, and customers would “pay” using nothing more than their fingerprints or facial scans. “It’s probably going to take a while for biometric POS terminals to make their way to a substantial number of merchants, and the idea of paying for something with a fingerprint or a face scan is going to take some getting used to for a lot of consumers, as well,” notes FindBiometrics. “But the convenience of such a system is, for many, an appealing prospect.”
5. Various Vendors Link Interactions Through Open Banking
Biometrics can be used to quickly facilitate users’ interactions between different apps or sites. Bank of America, for instance, allows customers to switch from their regular bank account to accounts associated with its multinational investment bank division, or its Bank of American Private Bank, using just a fingerprint scan. Even though these are all Bank of America operations, the setup shows how an open banking platform can link services from various vendors through a single interaction, Toolbox says.
“Some consumers consider biometric authentication invasive, or fear that fraudsters will find a way to access and use the stored data,” Toolbox adds. “But the arguments in favor of biometrics seem more compelling now to banks as they seek to make financial transactions more secure and convenient.”