With the global explosion of technology, the traditional methods are being challenged, whether it’s about identity verification for account opening, accessing your social media accounts or even making online payments. Online businesses and brick-and-mortar organizations are going to need more advanced and secure systems to incorporate consumers’ demands.
Passwords and Pin codes are well-intentioned and practiced authentication tools that have been used for years.
But bad consumer habits are making it insecure and vulnerable. People are using too plain and simple passwords; also, the same for multiple accounts and platforms. According to the 2017 visa study, only one-third of the respondents use unique pin or passwords for their accounts. Two-thirds of the respondents use the same information for multiple accounts, and more than once.
This habit of consumers makes their identities/accounts vulnerable to attacks, contributing to online fraud and scams.
However, it is believed that these problems are going to become a thing of the past in upcoming years as the trend of mobile and online payment is increasing, which is leading towards the adoption of biometric verification for transactions since passwords are no more reliable.
According to Biometrics group research inc. the worldwide mobile payment transaction is expected to reach $750 billion with more than 700 million users by the end of the year 2020.
Core Drivers Surrounding Biometrics
Over time, biometrics are becoming essential for businesses and organizations. Biometric verification is the latest method of verification that primarily focuses on usability, security, and improved customer experience, making it an essential feature for organizations to embrace.
Increased Usability and Improved Customer Experience
The application of biometrics is providing a new dimension for improved customer experience. Unlike the traditional authentication methods, the users don’t have to remember the myriads of passwords and pins to prove their identity. Many of the users find it annoying to change the passwords timely; some companies restrict customers from using alphanumeric passwords. A practice like this results in a significant increase of abandoned transactions affecting the customer experience.
Talking from the perspective of usability and convenience, biometric characteristics are unique for every user.
Biometric characteristics are readily accessible at any stage. Also, it is nearly impossible for the fraudsters to counterfeit these characteristics, unlike passwords. Due to their uniqueness and significant protection, users don’t require to change their pins and passwords frequently. It makes the authentication process sleek, secure, and seamless, increasing customer usability and enhancing the user experience.
Reducing Fraud and Fraudulent Chargebacks
Whether traditional or not, authentication has always worked on two elements:
- ID – to confirm who you are
- Passwords/Pins – to confirm you are who you say you are
With the advent of technology, passwords have failed to authenticate the real users; the reason being the passwords/pins are easily hacked and stolen through scamming apps and phishing emails. Biometrics verification is now a more secure method of user authentication as there is no burden on users for remembering the subtleties of the authentication process. It dramatically lowers user friction; henceforth, it dramatically reduces online fraud and scams.
With the help of biometric verification, the entire checkout process becomes more secure and streamlined and less complex, which leads to a significant reduction of abandoned transactions when users don’t remember their passwords. Every day, businesses have to face immense losses due to fraudulent transactions and false chargebacks.
Using traditional passwords doesn’t define if the user is authentic or not. However, the implementation of biometrics, especially facial verification, doesn’t only allow the authentic and authorized user to access portal, but it also restricts the consumers to verify their identity first before initiating transactions.
The eCommerce business commonly faces credit card fraud, which results in chargebacks. According to statistics, the E-commerce industry suffered an estimated loss of $6.7 billion in 2016 due to chargebacks. 71% of damage (i.e., $4.8 billion) was due to friendly/chargeback frauds. Practicing biometric verification helps the platforms in restraining the users from making false chargebacks and fraudulent transactions from someone else’s cards/accounts.
Biometrics Adoption on the Rise
As the trend of online payment is increasing, many applications and organizations have started to opt for biometrics solutions for the security of their payments and businesses. Let’s take the example of a few renowned companies that have successfully embraced biometrics.
- Apple pay is now making popularized use of fingerprints; Samsung pay and Android pay are now following the suit.
- Mobile Banking applications and Credit Card Pay are also employing fingerprints for secure transactions.
- Retailers like Amazon and AliPay are exploring biometrics through facial scanning.
- MasterCard is finding new ways to pay; in fact, they are introducing an identity check app, i.e., “pay through the face.”
Keeping these organizations in mind, it can be seen how the use of Biometrics is on the rise these days. Businesses are readily embracing this new technology not just to secure their transactions but also to provide more straightforward authentication methods to their consumers, improving their customer experience.
What does the future hold?
The online industries, including eCommerce and financial sectors, are fastly growing industries pouring a considerable amount of money and investments. With the increasing trend of digitalization, there is a notable rise in mobile and online payments. It has resulted in the need for more secure verification solutions, pushing the companies towards the transformation of traditional payment and authentication process.
Biometrics will become widespread due to its core peculiarity in enhancing the customer experience and securing the transactions. According to the 2017 visa study, it was reported that 70% of the respondents found biometrics easier than passwords, and 46% of them claimed that biometrics are more secure than other verification methods.
To say biometrics is a much simpler way to hold authentication won’t be an understatement. In developing countries, biometrics, along with AI-powered technologies, are used to provide identity verification services for various online businesses.
Due to improved user experience and secure authentication process, millennials are taking a keen interest in biometric verification. It was reported in a survey that a significant number of people in their 20s are willing to change their banks if their bank doesn’t offer biometric verification services.