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Today’s world is no longer different from the science fiction world. With the advent of technology, automation and artificial intelligence are transforming society. Biometric Verification technology is becoming a reality for businesses and industries dealing with finance. It doesn’t only have a significant impact on the payment industry but on the whole consumer’s industry in general as well.
The global explosion of technology is challenging the traditional methods, whether it’s about opening or accessing an account, verifying and authenticating individuals or making online transactions. The businesses need an improved, efficient and secure technology to compete with other organizations, meeting the customer demands. AI technology is continuously evolving and becoming more advanced and reliable for payment transactions.
The global explosion of mobile payments
The evolution of technology and automation have led businesses towards the global expansion of online and mobile payments. The trend of cardless payments and cashless society is on the rise. According to Biometrics research group inc. report, the worldwide mobile payment transactions are expected to reach $750 billion by 2020, with more than 700 million users. Taking into account the growing trend of online payments, the security concern is even more vigilant.
In online businesses, passwords and pin-codes are well-practiced authentication tools that have been used for years. However, bad consumer behavior is making these methods vulnerable to cybercriminals. For instance, people use too plain and simple passwords for their accounts, sometimes the same password for multiple platforms. As per a study conducted, only one-third of the respondents were using unique passwords/pin codes for their accounts. Whereas, two-thirds were using the same credentials and that too more than once. Such practices provide a golden opportunity for cybercriminals and fraudsters to exploit the identities of users and carry out fraudulent activities.
With the introduction of biometric technology especially, face verification, these problems are likely to become a thing of the past in upcoming years. Biometric authentication to approve a transaction or payment will eliminate the security concerns and secure the whole payments process. In fact, some big fishes are already opting for this new technology to the
Biometric Adoption on the Rise
As the world is moving towards the fourth industrial revolution, huge amount of money in commerce investment is pouring, eventually expanding the e-commerce industry. The rise of card-less and mobile payments is driving industries towards the transformation of payment and authentication processes. Many organizations are already adopting biometric solutions to enhance the security of their payments and businesses; some examples of renowned business are:
- Online retailers Ali Express and Amazon are exploring biometric technology through facial scanning. Also, amazon’s “smile to pay” feature is taking payment and customer experience to another level.
- Apple Pay is successfully embracing a popularized use of biometrics, specifically fingerprints. Android Pay and Samsung Pay are following the suit as well.
- Mobile Banking applications, Fintechs, and Credit Card Pay are also incorporating fingerprints and facial recognition for secure payments.
- MasterCard is exploring novel ways to enhance payment methods, in fact, they are introducing an extensive identity check app “Pay through face” for the transaction.
These organizations are creating a tough competitive environment for other businesses which is pushing them to adopt biometrics for secure and enhanced customer experience.
The benefits of Cashless Payments
As technology is evolving, the cashless mobile payments and online transactions are becoming more fast and convenient. To say biometrics play major role in taking industries along the road of smart payments won’t be an understatement. With enormous advantages and a competitive edge in the market, biometric verification is the fastest adopted technology. At first, the biometrics were limited to fingerprint scanning but over the last few years it has vastly improved – today, modern biometric solutions can recognize voice pitches, retinal scanning and even facial recognition and emotion reading through facial scanning.
The trend of online payments has grabbed the attention of intruders and fraudsters. They are always looking out for vulnerabilities to exploit user accounts. The traditional binary authentication method (user ID and Password) is no longer secure and easily hackable. A face verification solution provides an increased and efficient security check for online businesses. Biometrics are the unique features of an individual that can’t be stolen or compromised.
Moreover, according to a report, almost one-third of consumers and business owners accept that this new technology will lead to more secure and safe payments. 31% of the business owners claim that they feel safer with new payment tech as it reduces the chances of frauds and they would have less cash on their premises. Therefore, biometric verification is quite significant in verifying the users, that too in real-time
Improved Customer Experience
Apart from the perspective of mobile payment, paying through biometrics is much more convenient. Just by the touch of their fingerprint or showing the face in the camera rather than typing complex passwords on small screens. Also, biometrics eliminates the hassle of remembering the passwords. According to the 2017 visa study, 70% of the respondents think biometrics are easier than passwords and 46% of them find biometrics more secure.
Every day businesses are striving to be on the top. With the consumers’ attitude of welcoming speed and convenience, organizations want to meet the customer’s demands. Henceforth, adopting biometrics technology for fast and secure payments and enhanced customer experience makes complete sense.
Reduced Fraudulent Chargebacks
The explosion of technology and the increasing trend of online shopping have resulted in a higher ratio of digital frauds and chargebacks. Due to a lack of proper verification services and relying on traditional authentication methods, fraudsters are getting an upper hand in compromising user identities and making fraudulent transactions leading to chargebacks. Every year retailers and merchants lose millions due to fraudulent chargeback claims. In 2016, the e-commerce industry suffered a loss of around $6.7 billion and 71% was due to chargeback fraud.
Face verification at the time of checkout confirms the remote presence of individuals and records the proof of verification. Verifying identity in real-time helps in combating the fraudsters, hence reducing chargeback frauds.
Added check to meet Regulatory Compliances
The ever-growing digital fraud and identity theft cases have urged the government and regulatory agencies to take necessary steps for the prevention of online frauds and protect user identities. All the organizations dealing with money whether online or not, are enforced to meet know your customer (KYC), Customer Due Diligence (CDD), and anti-money laundering (AML) compliance. The failure to do so can land businesses into severe problems like hefty fines and even imprisonment.
Understanding the importance of meeting compliance, organizations are readily adopting the AI-powered verification services, biometrics being the most effective one. Not only for verification but biometric technology is a competent solution for authentication and a key element in securing the online transactions.