Biometric Wallets Emerge as Payments Modernization Strategy

As payments go digital, their authentication is getting more organic — literally.

One of the latest frontiers in the ongoing evolution of payments is leveraging biometric information for authentication, where the very characteristics of individuals — such as fingerprints, facial features or iris patterns — are used to authorize transactions securely and safely.

“Biometric authentication, while it exists for other aspects of our lives, is not a huge thing at this stage for payments — but as far as payments goes, it is the future,” Marc Hopkins, vice president at E-Complish, told PYMNTS.

And while biometric authentication for payments isn’t yet ubiquitous, the technology is poised to redefine how consumers interact with the payment ecosystem and reframe the daily transactions that make up their everyday lives.

“The ability for a customer to go buy a cup of coffee and not have to have to whip out their phone or their wallet, to simply just place their finger and scan to process a payment is ideal,” Hopkins said.

“We currently are pretty much a cashless society, so you can think of bio payments as making us a cardless and eventually phoneless society,” he said.

Traditional methods of authentication, such as PINs or passwords, are gradually being phased out, meaning there is the potential for them to be supplanted by biometric solutions that offer heightened security and convenience, while making payments more seamless.

A key enabler of biometric payments, Hopkins said, is the emergence of biometric eWallets (bio-eWallets), which serve as digital repositories for consumers’ payment and personal credentials.

Similar to physical wallets, bio-eWallets securely store credit cards, banking details and identification documents, but with the added layer of biometric authentication. From a consumer perspective, these wallets offer unparalleled convenience, eliminating the need to carry physical cards or even smartphones for payments.

“On the business side, if a customer wants to pay something like a utility bill, a company like E-Complish can set up a billing site and then that client can allow their customers to pay with their bio-eWallet so that instead of having to type in their card credentials, the biometric information authorizes the transaction in a split second,” Hopkins said.

Also from a business standpoint, biometric payments offer a trifecta of benefits that include fraud reduction, enhanced customer convenience and streamlined operations. By minimizing the risk of fraudulent transactions, businesses can save substantial resources currently allocated to fraud prevention measures.

The seamless payment experience facilitated by biometric authentication can drive customer loyalty and satisfaction, Hopkins said, ultimately boosting sales and revenue.

While the concept of biometric payments holds immense promise, valid concerns remain regarding data security and privacy. However, as Hopkins noted, the advantages provided by biometric authentication exceed those offered by traditional methods.

Unlike stolen cards or compromised passwords, biometric data is inherently tied to an individual and significantly harder to replicate or misuse. Additionally, the adoption of biometric payments is expected to be swift, driven by consumer demand for convenience and heightened security.

“We are in a society where convenience is key to scalability, even the small convenience of no longer having to take out a phone or wallet to make a payment,” Hopkins said, noting that every payment mechanism comes with its own endemic security flaws, and biometric payments help shrink the attack surface.

“Companies are spending thousands, millions, collectively billions on fraud prevention. Biometric payments can help reduce that cost,” he added.

Looking to the future, Hopkins highlighted the importance of education and awareness in driving the adoption of biometric payments. As with any emerging technology, widespread acceptance hinges on consumer familiarity and trust — while scalability ultimately relies on the integration of biometric payment options into existing infrastructure, which is crucial for seamless implementation across various industries and use cases.

Going out even further, Hopkins emphasized the potential for expanded applications beyond traditional transactions. Peer-to-peer communication and identity verification are areas ripe for innovation, he explained, where biometric authentication can offer unparalleled convenience and security.

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