Trustech 2018: Biometric Payment Cards beyond Payment Applications

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By Phil Sealy | 1Q 2019 | IN-5347

This year’s Trustech 2018 event had a common theme, with a host of vendors including FPC, IDEX, NEXT Biometrics, Gemalto, IDEMIA, Precise Biometrics, NXP, and Infineon having a heavy focus on pitching their respective biometric payment card technologies and/or exploring the related opportunities. Today the market is at an infliction point, with a number of pilots at various stages, and the year 2018 marking the beginning of the evaluation phase with an expectation that certification for mass commercial rollouts will be achieved as early as 2Q or 3Q 2019.

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Biometric Payment Cards: The Hot Topic of Conversation

NEWS


This year’s Trustech 2018 event had a common theme, with a host of vendors including FPC, IDEX, NEXT Biometrics, Gemalto, IDEMIA, Precise Biometrics, NXP, and Infineon having a heavy focus on pitching their respective biometric payment card technologies and/or exploring the related opportunities. Today the market is at an infliction point, with a number of pilots at various stages, and the year 2018 marking the beginning of the evaluation phase with an expectation that certification for mass commercial rollouts will be achieved as early as 2Q or 3Q 2019.

Payments remain the top target of priority, given the large total available market, where issuance exceeds 2.9 billion annually. But with many synergies shared between payments and other end markets, the focus is beginning to shift onto next-generation opportunities, utilizing the secure authentication experience of biometric payment cards across other verticals where high levels of security and privacy are a prerequisite or where fraud levels are considered to be high.

Expanding beyond Payment Authentication

IMPACT


Despite the fact that the biometric payment card has become synonymous with the payment cards market, the reality is that it is more than a payment technology. It is a secure authentication process designed to add another level of security via an MFA approach, with market convergence playing a significant role in opening up new biometric card end markets. New opportunities presenting themselves can be broken down into six buckets:

  • Government ID: The majority of national projects globally require the enrollment of a citizen’s biometrics. For this reason, significant opportunity exists for biometric sensor cards to merge public and private sector services, offering a platform from which a government can distribute social welfare, using the biometric sensor as proof of life to help protect against any associated fraud.
  • Access Control: Access control, most notably physical access, is considered a natural fit for the biometric sensor card, able to leverage existing contactless infrastructure to enable next-generation smart card authentication without significant infrastructure upgrade.
  • Healthcare: Healthcare presents multiple opportunities, such as using a biometric sensor card within employee and patient scenarios, and covering use cases including access control, payments, and identity verification.
  • IoT: Using the biometric payment card as a centralized platform for authentication requirements across a number of IoT end markets, including and perhaps most notably the smart home and automotive sectors, using the same card and technology to unlock an automobile, authenticate an in-car payment, or to securely access your home or to make any necessary adjustments to a smart home setup or automobile preferences.
  • Co-Branding: There is significant opportunity for co-branding with a number of other service providers or OEMs. Let’s take ride sharing as an example, where a biometric sensor card is co-branded and supported by the car OEM and an issuing bank, allowing the ability to pay at POS, but also a platform from which a user can securely access a ride sharing scheme. The same could apply for bike sharing, parking, and other smart city initiatives. As for the IoT, the opportunity for co-branding opens new market opportunities for those involved. It may enable an issuing bank to play and operate in end markets that previously remained out of reach.
  • Cryptocurrency: Use of a biometric payment card as a platform to securely store and authenticate cryptocurrency transactions in an offline, cold wallet scenario.

Convergence and Biometrics Chain of Trust to Drive New Use Cases and Innovation

RECOMMENDATIONS


The rise of the biometric payment card and the cross vertices it is able to address are being driven by a number of factors, most notably market convergence and financial inclusion, both of which are driving new levels of multi-application enablement. From a convergence perspective, two pillars are underpinning the opportunity. On one hand is the convergence of multiple applications within one particular market, such as retail, where payments, loyalty, and couponing can be combined. There are solutions where convergence is being achieved across a variety of end markets, combining services from various end markets including government ID, access control (stadia and events), campus cards, healthcare, etc., using the biometric fingerprint as a singular authentication mechanism.

Many governments are pushing financial inclusion programs, utilizing technology in order to provide a range of digital banking facilities to the unbanked. This is particularly prominent in rural areas, where a physical brick and mortar banking presence is not feasible. Paired with this is trust and technologies, where the biometric sensor card can be utilized to provide higher levels of assurance between bank and customer, in turn reducing risk for both parties, while presenting the ability to offer digital banking services in a remote fashion. Financial inclusion is proving an important piece of the multi-application market, with programs combining payments, social/welfare, and identity.

Although the biometric payment card is a relatively new concept, fingerprint authentication has and continues to be used across many different device types. Fingerprint authentication also spans a multitude of use cases, whether securely granting access to a device in a logical access control scenario, a physical access control use case to securely enter a building or pass through a physical barrier/gate, or used to authenticate a transaction, whether that be a payment or used as a secure digital signature. Fingerprint authentication presents a significant opportunity to use one identity across a variety of use cases and end markets. The biometric payment card is another piece of this security puzzle, extending and expanding a biometric fingerprint chain of trust, which largely targets online devices today, toward offline media in the payment card sector.

Although this market remains in a nascent phase, the rise of new applications is creating a new wave of market activity and active vendors need to be flexible in their respective marketing activities. Today vendors cannot afford to limit themselves to one or two end markets, needing to actively push biometric sensor card solutions across multiple vertices, using as another proof of concept and demonstrating how biometric sensor technology is relevant across multiple authentication use cases in order to drive further multi-application enablement.

 

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