MasterCard has decided to trial a radical new payment system for online purchases. Here on the Htet Tayza blog I explain how biometric technologies are altering global financial transactions.
The financial transactions sector is currently experiencing a period of rapid change. This can somewhat be attributed to the rise of the smartphone. A Mitek survey of 1,004 millennials indicated that 86% execute online purchases or other transactions with their smartphones.
Firms have developed technologies which allow people to pay for purchases with their phones. However most of these innovations depend on passwords. Ajay Bhalla, president of enterprise security solutions for MasterCard noted that “within most parts of the world, when you do a digital transaction, you use a password, and that’s a big problem because people can’t remember them.”
This means that they’ll struggle to complete the transaction. Current forms of online payment also pose something of a security risk. Figures from Aite, a security firm, indicate that 45% of payment card losses are from online transactions. CNBC recently reported that MasterCard has developed a new technology to boost online payment security, by letting users authorise a purchase with a selfie (or a scan of a fingerprint) instead of a password.
The consumer would need to download MasterCard’s Identity Check app to use its selfie payment option. Therefore if you’re purchasing a product which requires identity verification, you’ll get a push notification on your smartphone. You would open the app, hold the phone to your face (similar to if you were taking a selfie) and blink.
The app’s facial recognition technology converts your features into a string of ones and zeros, and that, not your actual picture, is processed. This means that your face is all the password you need to authorise a transaction. The blink prevents criminals from holding up a picture of your face to persuade the Identity Check app to process the payment.
The technology is currently being trialled for two months by more than 200 employees of First Tech Federal Credit Union in the U.S. If this trial and a similar one being held in the Netherlands prove successful, MasterCard will extend usage of the fingerprint and selfie technology first to more banks, than according to Bhalla, “it eventually will be rolled out to everybody.”
It’s worth noting that MasterCard isn’t the only company developing biometric online payment technologies. Apple Pay already lets customers authorise payments with a fingerprint. Visa has developed a technical blueprint which will eventually allow people to use biometrics such a faces, palms and fingerprints for online transactions.
Future of security
Matt Schulz, senior industry analyst for CreditCards.com said “when your face is your password, you can’t forget it, and it’s much harder to steal than a PIN.” I couldn’t have put it better myself, biometric technologies provide security which PIN and password-based online payment methods can’t compete with. This is why I believe we’ll all soon be using biometric technologies to authorise payments when we shop online.