As merchants, consumers, and financial institutions seek increasingly adaptive meeting-points through which to conduct business, research shows the public is increasingly wary of the security risks associated with such technology. Isabella Grotto reports on the latest biometric security software
Fruit of the partnership between Arizona mobile commerce solutions provider Spindle and ValidSoft, an authentication and verification software company headquartered in Ireland, the MeNetwork360 app combines a mobile marketing and advertising platform with a payments capability in the form of a mobile wallet.
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Set to total $250bn in 2014, growing to $750bn and involving over 700m users by 2020, according to the Biometrics Research group, the global mobile payment industry shows no sign of slowing.
The group also found that biometric technology has the potential to speed mobile commerce, by pairing strengthened security with intuitive application – a balance the collaboration between Spindle and ValidSoft seeks to achieve.
Bill Clark, chief executive officer of Spindle, says: ‘Spindle is dedicated to expanding beyond traditional electronic payment boundaries by offering cutting-edge solutions that allow clients, partners, merchants and consumers to take full advantage of the rapidly emerging mobile economy."
Elaborating on the partnership with ValidSoft, Clark continues: "What we’ve elected to do is to use the ValidSoft authentication components in the wallet component of the mobile app.
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By GlobalData"Here in the US if you have a credit card, you essentially have somebody’s money. Authentication in my mind is one of the biggest challenges in the payment space.
"I think that the partnership with ValidSoft gives us a real advantage when it comes to reducing risk and really providing a very ‘clean’ interface for consumers."
Voice biometrics: the future of authentication?
ValidSoft’s authentication system is a multi-layered approach which includes voice biometrics, a technology that, though by no means new, faces significant competition from other forms of biometric security.
In particular, a strong competitor can be found in increasingly popular fingerprint technology. A favourite of tech trend-setter Apple, the technology holds the largest share of the world biometrics market, a position it is expected to maintain, according to a report by Transparency Market Research titled ‘Biometrics Market – Global Industry Analysis, Size, Share, Growth, Trends, and Forecast 2012 – 2018’.
The report found the overall sector of facial structure, iris, veins, and voice recognition to be the second largest, though faster growing, sector. Worth an estimated $1.4bn in 2010, it is expected to maintain a CAGR of 19.9%, reaching $3.5bn in 2015, compared to the $6.6bn forecast for fingerprint biometrics.
However, both ValidSoft and Spindle remain confident in the potential of voice biometrics, which they believe will succeed thanks to a combination of security and simplicity.
"I’ve already seen a Youtube video where someone can lift a fingerprint and use that to access the device," says Clark.
"Fingerprint, eye-print, face-print are all very static. Voice can be dynamic because I can ask you to repeat a phrase or repeat a few numbers that are randomly generated and which means they cannot be pre-recorded"
The technology also holds other advantages, according to Dan Miller, senior analyst and founder of Opus research, authors of the 2013 report: ‘Using Voice Biometrics for Strong Authentication and Risk Reduction’.
"We initially saw the major advantage in its ubiquity, because everybody has a voice and any phone can be used to enrol and to capture a pass-phrase," he explains, whereas technologies such as fingerprint biometrics mean "you still have to have a phone that has a fingerprint reader."
According to both the companies, ValidSoft’s technology’s strength lies in its potential to leverage an increasing reliance on mobile technology, while facilitating user access.
"Traditionally banks would require the use of a code or token, and in these models there is strong authentication, but they are often a lot more friction to the user, as they involve carrying around a token, whereas the use of a mobile phone and data channel or telephone call is a much more usable model," according to Dan Thornhill, product manager for ValidSoft.
When asked whether widespread voice biometrics use will be dependant on a significant shift in consumer behaviour, Clark says: "I’ll admit it is early in the process. I think the market will tell us what is appropriate, but so many people today are used to talking to Siri, that I don’t know that we will be looking to change behaviours substantially."
Thornhill adds: "I think it’s already starting to happen. We’ve got companies like Barclays using voice biometrics to authenticate users, it’s now being used in call-centres to provide passive authentication…I actually think the convergence towards using voices is already under way, certainly from a commercial and security point of view."
Clark concludes: "we haven’t really changed the world, but we’ve leveraged the payments networks in a slightly different way and we’ve abstracted the payment processing piece from that interaction between the merchant and the consumer."
A highly competitive industry
The support of these merchants is vital to companies such as Spindle, as a rapidly growing payment industry means it faces competition from a number of well-established players.
While recognising the market facing Spindle as a highly competitive one, Clark believes the MeNetwork360 has a role to play: "We want to compete; we need to compete with the rapidly evolving Square.
"In this market it seems almost every day there’s new news and what we’re trying to do is to leverage different kinds of constituencies.
In particular, he says: "We are focused on small to medium-sized businesses, as the big guys have their own infrastructure and their own tech people.
"The rest of the merchants in the market are left on the sidelines, wanting to have some sort of mobile solution…they typically can’t even buy a solution without a large capital investment and most smaller merchants really don’t know that much about the tech side.
"We’ve positioned ourselves to be a friend to those small businesses, to bring payment processing as well as mobile marketing and advertising in a single platform."
Despite not yet being available, Clark holds high hopes for Spindle’s new product on the basis of the previous programme success: "We’ve got about 6000 merchants in the US, and about 400000 consumers using the MeNetwork mobile app currently."
As for the MeNetwork 360: "we’re targeting the very first part of 2014, probably mid to late January before this thing rolls out in earnest," he said.
