Biometric Card Set To Be Next Big Thing In Payments Industry

Biometric card technology is quickly gaining popularity in the payments industry, with experts noting its potential to reshape how transactions are conducted. Offering improved security, convenience, and efficiency, this technology is set to address concerns around fraud and identity theft.

Biometric card technology is the use of biometric authentication methods, like fingerprint recognition, directly into payment cards. Transactions are authorised using unique physical characteristics in place of a PIN or password and eschewing altogether contact with a card.The cardholder's biometric data is securely stored on the card, enabling quick and secure transactions.

"Biometric card technology is set to be the next big thing in payment systems, offering enhanced security through fingerprint authentication directly on the card. This feature ensures that only the cardholder can authorise transactions, addressing concerns of digital fraud and theft. Moreover, biometric cards maintain the ease of use of traditional cards but with a higher security level, as the biometric data is stored on the card itself, complying with data protection regulations like GDPR," said Kunal Varma, CEO and Co-founder, Freo.

Enhanced Security And Convenience
The primary advantage of biometric payment cards is their high security. Fingerprint authentication ensures that only the cardholder can authorise transactions, reducing the risk of fraud. This technology also offers convenience by removing the need for PINs or signatures, speeding up the checkout process.

"Biometric card technology is offering a combination of security and convenience. By integrating fingerprint authentication directly into payment cards, it removes the need for PINs or signatures, creating a more personalised transaction experience. This technology addresses concerns around fraud and identity theft, ensuring that only the cardholder's biometric data can authorise a payment, enhancing trust in digital transactions," noted Sandeep Sethi, VP of Sales- India and South Asia, Wibmo, a PayU Company.

Real-World Implementations And Wider Adoption
Financial institutions are already piloting biometric card technology to enhance payment security. JP Morgan is testing biometrics-based payments in the U.S., while Mastercard has successfully conducted a biometric payments pilot in Brazil. Additionally, Thales has introduced a biometric payment card with a fingerprint sensor, certified by Mastercard and Visa.

In India, Mastercard is actively supporting this transformation. "India's digital transformation is paving the way for Viksit Bharat 2047. Mastercard is supporting this vision by making commerce safer and more inclusive. We chose India for the pilot launch of Mastercard's Payment Passkey Service due to its tokenised digital ecosystem and focus on secure digitisation. This pilot shows our dedication to promoting safe digital interactions and building trust across all touchpoints. By integrating tokenised payment credentials with biometric authentication, Mastercard is unifying industry standards to enhance checkout security," said Ravi Datla, Senior Vice President, South Asia, Mastercard.

The global biometric payments market is growing rapidly, with Goode Intelligence projecting it to reach USD 5.8 trillion and 3 billion users by 2026. A Visa survey also revealed that 86 per cent of consumers are eager to use biometrics for authentication, with 70 per cent finding it simpler and 46 per cent believing it provides enhanced security.

Impact On Consumers And Merchants
Biometric payment technology not only benefits consumers with security and convenience but also offers advantages for merchants, such as faster checkout times, reduced fraud, and improved customer satisfaction. Biometric payments can also lower transaction costs compared to traditional cards.

"The adoption of biometric cards depends on whether issuers and merchants are ready to set up the required systems. Their wider use is encouraged by their efficiency in verifying identities and improving security, not just in payments but in sectors like banking and healthcare. As AI and machine learning advance, biometric technology will significantly influence how we handle personal identity and secure transactions in a digital-first world," stated Varma.

Sethi added, “With the growing smartphone penetration in India, it’s only a matter of time before biometric authentication becomes the standard. Companies like Wibmo, who lead in payment authentication, have already implemented this with their Tridentity AFA solution. The rise of contactless and digital payments makes biometric cards a natural step in the quest for faster, safer financial transactions. As consumer acceptance increases and infrastructure upgrades take place, biometric card adoption will likely be swift. This technology promises to introduce a new era of secure, frictionless transactions worldwide.”

Challenges And Future Outlook
While biometric payment technology has significant potential, it faces challenges such as privacy concerns and infrastructure upgrades. Despite this, the advantage of adoption is seen by financial institutions, merchants and consumers making the rate of adoption increase.

Biometric card technology is expected to become a major player in the payments industry as the difference in security and convenience defines the future. Since a growing number of businesses are using biometric solutions, this type of payment method is gradually becoming a standard one, transforming how we manage personal identity and financial security in a digital-first world.

Satyam Mishra

BW Reporters The author is a trainee correspondent with BW Businessworld