More than 10 years ago, RBI and sister publication Electronic Payments International, highlighted the potential benefits of the then new concept of biometric payment cards. Specifically, the writer recalls a demonstration hosted by Mastercard and a Norwegian bank in London as long ago as 2014, to highlight what was dubbed the world’s first biometric contactless payment card. Since then, it has become a regular feature of our annual new year forecasts feature for payments experts to aver that biometric cards would be the next big thing in payments technology. So, the concept is not novel. In the UK, NatWest claimed a country first with the launch of its first biometric fingerprint card in 2019.
RBI discusses with Tolgahan Yildiz, VP of Trusted Mobile Connectivity and Transactions, Infineon, why previous pilots have not led to full rollouts.
Yildiz:
Several issuers launched pilot projects to a handful of customers since 2019, but the projects were hindered by three major challenges.
First, enrolment was complicated for users and expensive for banks. Users either had to enrol at a bank branch, or use an expensive ‘sleeve’ device at home. This resulted in an unattractive, inconvenient user experience.
Second, banks were deterred from launching pilot projects because of prohibitively expensive card production, complex implementation, limited support, and time to market was unacceptably long. As such, it was hard to truly gauge cardholder enthusiasm for using the cards.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalDataThird, customers were still uneasy using biometrics. Many cardholders misunderstood how their biometric data would be used, not realising the data is only stored and processed on the card; it is not even accessible to their bank.
These challenges combined to deter both banks and their customers from pursuing biometric cards – at least until the manufacturing process and user experience could be improved.
RBI: So, what’s changed, in your opinion, to make the biometric offer more appealing today?
Yildiz:
What’s changed is the investment that’s been made in innovation and support, as well as numerous emerging use cases – beyond contactless payments – that are looking very exciting.
To begin with, the challenges I outlined earlier have been overcome, resulting in a more affordable premium cardholder offer.
Issuers today can offer customers easy, inexpensive enrolment, which now takes place either on the user’s smartphone or in their favourite stores. There’s no expensive hardware and no need to visit a bank branch.
This expands the biometric card market to branchless neobanks and fintechs – who are always looking for innovative ways to market their brand – enabling them to offer an enrolment experience befitting their digital-first status.
Card manufacturing itself is also a critical innovation, as it has enabled turnkey solutions and scalabilities. What this means is that production is now compatible with existing manufacturing equipment, with only minor adaptations. This keeps costs down, enabling a high production yield, as well as cost-efficient and frictionless onboarding.
Card solutions today comply with dedicated Mastercard and VISA specifications and comprehensive guidance and support is available. This enables a go-to-market process that is quick and simple.
And finally, we can start getting excited by emerging, value-add use cases that biometric cards could unlock. These will take potential applications far beyond just payment, helping banks play a central role in the new world of digital identities.
RBI: How are biometric cards unlocking the next wave of use cases?
Yildiz:
Biometric cards enable banks to manage their own customer experience, rather than losing control of the user journey to mobile platforms owned by OEMs. By putting fingerprint cards into customers’ hands, banks can showcase their own branded payment solution, enabling trusted experiences both digitally and in-store.
For example, biometric cardholders can ‘Tap to Verify’; tapping their card on a POS device, using their fingerprint to confirm their identity and signify that they are the legitimate cardholder. They can also ‘Tap to Authorise’, using their biometric card to approve a transaction quickly, conveniently and with an added layer of security.
We’re also in a world of increasingly smart devices, many of which are equipped with NFC (near-field communication) capabilities. Biometric cards could enable cardholders to ‘Tap to Authenticate’, tapping their card to an NFC-enabled device to log in to a secured session, confirming they are the account owner for a bank account or merchant website, for example.
These scenarios will become increasingly widespread as consumers grow more accustomed to using biometrics to authenticate themselves and authorise purchases of goods and services.
At the same time, the rise of increasingly capable AI tools presents new and evolving cybersecurity risks, which is driving more banks to establish secured, convenient and trusted digital interactions with their customers.
Combining biometrics with Secure Elements provides new ways to help mitigate the evolving risks that banks, merchants and cardholders face.
As users struggle with password apathy, delivering fast, convenient and trusted biometric authentication for services and purchases could be a massive game changer in tackling phishing attacks and reducing fraud.
But obviously, that is not all. Banks could also enable biometric cardholders to store and manage digital assets, providing a secured and convenient way to access digital currency accounts. This is an opportunity that is, as yet, largely untapped.
RBI: Will issuers want to invest in biometric cards?
Yildiz:
More than anything, banks trade in trust. It has always been so: we as customers trust that our money will be robustly secured, while remaining easily accessible to us – and only us – as and when we need it.
As artificial intelligence helps cybercrime to grow and scale, consumers will be concerned about security and who to trust with their money. Biometrics aren’t just a cool gimmick, they offer real value by helping worried consumers trust their bank more. Market insights firm Global Data wrote in a 2023 report that “biometrics adoption has the potential to enhance efficiency while shaping the future of privacy and regulation”. In short, they offer an additional layer of convenience and security in today’s digital, global society.
And because the card is something physical the customer holds and uses, it can be a visible symbol of that trust – much like the firm handshake previous generations once shared with their local bank manager.
Today, it’s up to the banks to decide how to stand out in a fiercely competitive financial services market. But it’s important to recognise that physical cards are not disappearing anytime soon. Over 13 billion+ EMV® chip cards are deployed worldwide, offering unprecedented payment reliability, trust, consumer familiarity, and robust, universal security.
Whether you’re an established bank or a newer entrant, this means that the payment card remains – and will for the foreseeable future – the most visible and sustainable way to connect the customer and the brand, with the potential to support secured journeys for new use cases far into the digital age.
We’ve seen many banks launch colourful cards, or metal cards, but at the end of the day this is a marketing tactic rather than a value-add to the customer. What biometric cards do is enable marketers, acquisition/retention managers and CTOs to unite around an innovation that delivers on each of their ambitions: building brand visibility alongside convenient, secured cardholder experiences.
Quite simply, if banks don’t offer a trusted gateway to these experiences, someone else will.
