Securing Payments through Biometrics: Help or Hindrance?

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By Sam Gazeley | 2Q 2023 | IN-6963

Developments in biometrics-based solutions are taking hold in a wide variety of end markets and have now fully expanded into the payments and banking space. The majority of exposure, so far, in this market has been through smartphone biometric hardware, which is now leveraged as part and parcel of most high-street banking app authentication processes.

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A Segue from Mobile to Wider Payments


Establishing an ecosystem to facilitate secure payments is a mandatory facet in the realm of digital transactions, with biometric identification establishing itself as a transformative technology in the market. This ABI Insight examines the role biometrics are already playing outside of the previously recognized use cases, the potential next market shift forecast by ABI Research, and ongoing usage-related problems.

The expansion of mobile payments has increased the use of biometric authentication; secure and streamlined authentication of transactions has become a reality through mobile devices sporting facial recognition or fingerprint sensors. Biometrics enable users to leverage their smartphone devices as digital wallets and improve the security of mobile payments by adding an additional layer of security.

How Are Biometrics Enhancing Payments?


Biometric authentication technologies enable the identification of customers with extreme accuracy. Biometric verification nearly guarantees that only authorized people may access and send payments by evaluating distinguishing biometric attributes to minimize the chance of false positives or false negatives. This accuracy increases consumer and company confidence, while enhancing the overall security posture.

Furthermore, biometric innovation continues to support the security of transactions and access to bank accounts. Artificial Intelligence (AI) and Machine Learning (ML) developments will serve to adapt and increase the precision of biometrics. This will help to future-proof biometric solutions against new and previously unforeseen threat vectors. New biometric technologies and modalities can also be developed and improved, such as palm vein scanning and gait analysis, which are emerging modalities in the wider biometrics space.

It is also critical to consider the role of regulatory frameworks, built to safeguard user privacy and prevent abuse by addressing privacy and security concerns. A well-established and widely recognized ruleset is critical around the storage and use of biometric data, primarily as the continued expansion of biometric authentication in secure payments depends on finding the ideal balance between convenience and privacy.

Balancing Market Expansion against Increasing Threats


ABI Research anticipates that the role of biometrics in the payments and banking market retains significant untapped potential, with many use cases and trends emerging:

  • Voice Modalities: Stemming from recent advancements in voice recognition technology, safer payments are becoming easier to achieve through the use of voice commands, significantly boosting accessibility and convenience.
  • Multimodal Biometrics: A range of biometric modalities, including fingerprint and facial recognition, are being combined to facilitate improved authentication and safeguard against fraudulent activity.
  • Standardization: Industry-wide standards for biometric authentication must be established in order to ensure compatibility and interoperability across multiple platforms and payment systems.
  • Biometric Blockchain Payment: Leveraging the immutability of a distributed ledger and security nascent to blockchain technology reinforces the privacy and integrity of biometric data used in payment transactions.

However, many customers and ecosystem players are still reticent about the role biometrics should play in payments, with two primary concerns currently circulating in the market.

  1. Data Collection/Storage Issues: The capturing and storage of customers’ biometric information is the lynchpin for effective biometric authentication. While this information can enhance the security of transactions, it also raises questions around privacy and the potential for unauthorized access to or exploitation of sensitive personal data. Biometric information cannot be updated once it has been compromised, unlike passwords or Personal Identification Numbers (PINs), making people permanently vulnerable. Additionally, the possibility of broad profiling and monitoring increases as a result of the collection of biometric data across numerous platforms and services.
  2. Deep Learning and AI Advances: Deep learning and AI developments have sparked worries about the possibility of fraud and infrastructure manipulation as it relates to biometric authentication systems. AI algorithms can be leveraged to imitate biometric characteristics with alarming accuracy, facilitating successful impersonation and unauthorized access to data. For instance, emerging AI-created voice synthesis technologies are developing the ability to accurately replicate a customer’s voice, with the threat of deceiving voice recognition systems, not unlike deep false images or masks created by AI spoofing facial recognition algorithms. These discoveries emphasize how critical it is to stay on top of the development of AI capabilities and to regularly update biometric authentication systems to address any weaknesses.

It is clear that the payments and banking market is experiencing the expansion of biometric technologies as a double-edged sword. What it gives in terms of convenience and security in a market of customers who demand increasingly faster and more secure services, it also takes away with another layer of fraudulent activity to contend with, as malicious actors leverage emerging technologies to facilitate illicit activities.