New EU regulations scheduled to come into force in September 2019 will cause a significant increase in the use of biometrics to verify online payments, Mastercard predicts.
Currently, just 1-2% of online card transactions require authentication to complete a purchase – usually via password – but this will surge to 25% next autumn as new EU rules aimed at thwarting fraud take effect. These regulations will increase the number of transactions requiring two-factor identification, also known as “Strong Customer Authentication” (SCA).
Online payment authentication and account access will be granted based on two or more factors – something you know e.g. a password; something you possess e.g. a phone or card; something you are e.g. a fingerprint.
Most impacted will be online card purchases – desktop or mobile – although it will also apply to some contactless payments to periodically check the card is being used by its owner. In-store chip-and-pin is already a two-factor process.
Mastercard says it is working with banks and the payments industry to minimise disruption to consumers.
The use of passwords to authenticate someone is woefully outdated, with consumers forgetting them and retailers facing abandoned shopping baskets,” said Ajay Bhalla, President Global Enterprise Risk and Security, Mastercard.
In payments technology this is something we’re closing in on as we move from cash to card, password to thumbprint, and beyond to innovative technologies such as artificial intelligence. It’s far easier to authenticate with a thumbprint or a selfie, and it’s safer too.”
Mastercard’s Identity Check service enables a consumer to use their mobile device to be biometrically authenticated via fingerprint, iris or facial recognition in order to complete online purchases. The company is also testing a biometric payment card with built-in fingerprint sensor that can be used in-store without retailers having to upgrade their payment terminals.
Find out more about the future of biometrics with our interview with Eric Le Berder, Ingenico Product Manager for Banks & Acquirers.