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.
Third, 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.