Road2BUP: Commerce – Naked Payments

Continuing down the Road to Biometrics UnPlugged and focusing on commerce throughout July, we at findBIOMETRICS have taken a look at an overview of next generation finance, end user experience in biometric banking, and three real deployments of strong authentication tech in commerce. Today we are going to examine the idea of paying with a biometric and nothing but a biometric. Welcome to the world of naked payments.

What About Mobility?

In terms of payments secured by biometrics, the majority of hype concerns smartphone enabled online transactions or point-of-sale mobile apps that turn personal devices into biometric credit cards. Many experts in the arena of mobile retail solutions believe that the smartphone will play a key role in this new wave of payment solutions, but the market is still in its infancy.

An alternative to point-of-sale mCommerce exists, and in many cases it doesn’t require anything other than the the customer’s physical presence. In a hypothetical situation, many of these payment options could be performed naked, at the very most requiting a proximity token to be present. It’s the idea that your financial standing is about who you are, not what card you have.

Never Forgetting Your Wallet

There are three examples that bring different topics to light in the discussion of biometric point of sale. All of these examples share one thing in common: they don’t require a card, phone or cash for a transaction to take place. From an end user perspective, your wallet is simply a part of who you are.

Fujitsu’s palm vein biometric technology is a key component in the PulseWallet payment terminal. PulseWallet requires first time users to enroll their vein biometrics in a registration process, after which the system will allow for real-life payment through an encrypted scan of the palm. Allowing for the storage of coupons and receipts in addition to payment, the PulseWallet gives customers exclusive access to their digital wallet at the point of sale terminal.

The PulseWallet represents a commercial party entering the payments space with a system and hardware that can make payment easier, but requires investment on behalf of the merchant. As an incentive for adoption, the makers of PulseWallet underline that because the entire transaction is biometric and digital, the solution is paperless, requires no plastic account cards and therefore environmentally friendly.

In Vietnam, a naked payment system went live earlier this year. Enabled by fingerprint biometrics from TSYS (as selected by Vietnam Eximbank), the solution allows for payment and cash withdrawal with the touch of a finger. Again, all that is needed from the customer is prior registration, after which she only needs to bring her finger to the store in order to complete transactions.

The key idea driving the Vietnamese fingerprint payment system is accessibility. On the launch of the system, Mitsuaki Shiogo, vice president of Eximbank commented: “Ease of payments is central to the Eximbank vision of financial inclusion and the implementation of transaction identification and authentication with the support of TSYS and Fingerprint Technology is key to achieving this objective.”

Right now, a similar system is being considered in France. Though not completely “naked” in the way I’ve been using the term so far, France’s interbank network, Groupment des Cartes Bancaires CB, is considering a point of sale biometric solution that uses fingerprints and an invisible security factor.

The will have biometric readers it in-store points of sale, allowing for a customer to conduct transactions with the simple placement of her fingerprint. Initially the system will be two-factor on the part of the end user, requiring the submission of a biometric and the presence of a keyfob (to eventually be replaced with a micro-SD card in a mobile phone). The user only need to be carrying this factor and is not required to submit her keyfob or phone. This means that, from an end user perspective, payment and cash withdrawal will simply involve the touch of a finger.

Paper, Plastic or Palm Veins?

In payment situations, convenience is key and credit card technology has evolved to a point in which a user simply needs to tap a reading device to make a purchase. That is difficult to compete against in terms of ease-of-use.

When biometrics are brought into the equation, specifically in a naked payment scenario, that competition is met. The tap of a card becomes the tap of a finger or the motion of a hand. Add in the fact that (given that adequate liveness detection is in place) your average fraudster can’t just steal your biometric factor to go on a tap-happy buying spree, and biometric point of sale starts to look even more attractive as the payment option of the future.

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Stick with findBIOMETRICS all summer long as we continue down the Road to Biometrics UnPlugged. Have an urge to keep this discussion going? Follow us on Twitter and use the hashtag #Road2BUP to let us know your thoughts on biometric deployments in finance.

July 24, 2014 – by Peter B. Counter