Across Europe, Biometric Payment Cards Reappear 2023
From tap-to-pay debit and credit cards to mobile smartphone wallets, contactless technologies have propelled new waves of innovation in payments post-pandemic, spurred by a rising consumer desire for flexible, quick, and touchless transactions.
Biometric payment cards, which Michel Roig refers to as contactless 2.0, are expected to improve the card user experience by allowing users to confirm any payment transaction with a single finger touch.
Roig, head of payment and access at the Swedish biometrics business Fingerprint Cards, stated that the ability to eliminate payment transaction limits and standardize payment criteria regardless of a user’s location is fundamental to biometrics’ attractiveness.
“Depending on where you are today if you exceed the [payment] limit, the user experience is not uniform,” he told PYMNTS. It varies according to area, country, and bank.
Adding biometrics eliminates this issue: “You just place your finger on the sensor, tap to pay, and you’re on your way… We refer to it as contactless 2.0 since it is an enhancement over ordinary contactless cards,” he stated.
And it may not need much more to persuade customers. Roig cited data indicating that consumers have a significant desire for biometric technology, with a rising percentage of them prepared to pay for fingerprint-enabled cards or transfer banks to obtain one.
He observed that existing customer demand exists. Roig believes that the combination of consumer-centric demand and acceptance by FinTechs and challenger banks will accelerate the deployment of biometric technologies in the future.
Toward an Effortless, ‘Nearly Free’ Enrollment Process
In contrast to the reluctance of banks to invest in biometric payment systems, Roig stated that an increasing number of financial institutions (FIs) are beginning to see the actual value of cards with fingerprint scanners, resulting in a large uptake over the past few years.
“The fact that we’ve gone from essentially no launches before 2022 to 13 institutions that have launched is a significant indicator of [the potential of] our technology. And I believe that same upward trajectory will continue this year,” Roig stated.
In spite of the increasing potential for biometric card usage, he admitted that the high-cost barrier must be addressed for biometric payments to truly ignite and reach critical mass, especially among FIs that do not yet view biometrics as a “revenue generator.”
To boost the penetration rate of these revolutionary cards, it is also necessary to eliminate friction during the enrolling procedure.
Compared to a contactless card, which can be used immediately with a PIN number after activation, a biometric card requires an additional step to properly record user data via the fingerprint sensor.
Roig stated that a transition to home registration would make the process faster and more smooth while keeping costs low for FIs. The majority of the first banks to launch are now doing this enrollment procedure in-branch.
“We’re aiming to create a frictionless, nearly cost-free registration path… and once this final barrier is removed, there will be no more obstacles [to adoption],” said Roig.
In the future, instead of focusing on raising the number of biometric cards in circulation, he suggested that additional banks in other locations should introduce the cards commercially.
This will result in a snowball effect, according to Roig, because “if one bank in one nation adopts, the rest will normally follow”