Plastic is Perfect: Do We Need So Many Biometric Options?

My new Samsung Galaxy S3 watch looked great on display at Best Buy, with features to track walking steps, changeable faces and Samsung Pay. I talked myself into the $350 expense because I like to test different payment options, and though I have done both Apple Pay and Samsung Pay transactions on my mobile device, I figured now was a good time to try the watch option. If I want to set it up, data will stream through the watch to my tablets and desk top.

So far, I am underwhelmed and am in the “so what” zone. I can whip out my wallet an insert by Amex, Discover, Mastercard or Visa card in less than 12 seconds. Yes, it can move my steps into my PC tracker but that’s not a big relief.

Today’s read comes from the WSJ and discusses what Europeans are doing to enhance cardholder validation at the point of sale.

  • Credit-card companies, banks and vendors are changing how they verify consumers’ identities. Passwords and PINs could become less important. Biometric analysis could become the norm.
  • The proving ground for the latest in payment technology is Europe, where a new law could encourage greater use of biometrics in a bid to reduce burgeoning payment fraud.
  • Starting September 2019 in the European Union, a large portion of online payments greater than €30 (currently about $35) will require multifactor authentication.
  • Consumers will need to use two of three things to verify transactions: something they know, like a password; something they have, like a digital device, perhaps a USB token, that identifies them; or something they are: biometric data.

Fraud is about adding protection layers. You need to protect the card and insulate it from fraudsters with holograms and EMV chips. You need to watch merchants with software such as ACI ReD Shield and know more about customers than their next door neighbors do with technologies with FICO Falcon. The big deal here is do you want to slow down sales while people fumble with technology? In some markets, people do not even want to enter PINs.

  • “Part of the challenge has been lethargy. We’ve seen that with chip and PIN in the U.S.,” says Mr. Stickland, referring to the card industry’s ponderous transition away from requiring signature-based payments.
  • “The only way to get rid of passwords is to have a number of biometrics, so if one fails, you can use another one,” he says. “We’ll start to see more biometrics used to verify identity…. You’ll walk up to the counter, use face recognition to initiate the payment, and that’s it.”

So for now, I will enjoy the watch but probably not do another watch transaction for a while. I could swipe my plastic pretty quickly before, and have mastered the insertion of a card.

Overview by Brian Riley, Director, Credit Advisory Service at Mercator Advisory Group

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