Fingerprints will help payment cards retain relevance

Biometric payment cards with built-in fingerprint sensors could add $5bn to revenue in the global banking sector by 2026.

According to UBS bank, the biometric technology could help payment cards retain relevance in the face of mobile payment alternatives.

The proportion of card payments made using contactless technology is increasing rapidly, with an acceleration during the Covid-19 pandemic with people forced to reduce physical contact.

According to data from Barclaycard, contactless payments accounted for 88.6% of all card payments in 2020.

But, unlike mobile payments such as Apple Pay, contactless cards have a limit on how much can be spent. This is because apps such as Apple’s payment service require the user’s fingerprint as authentication, while contactless cards do not.

A card with an embedded fingerprint sensor would allow extra authentication because the user would have their fingerprint on the sensor while making the payment, in the same way as an Apple Pay user.

The maximum single payment that can be made in the UK using a contactless card is currently £45. This has increased from £10 when the technology was first introduced in 2007.

The pandemic and its restrictions on human activity has boosted the use of contactless technology and fuelled demand from consumers and businesses for the ability to make higher-value payments using contactless cards.

For example, banking industry trade body UK Finance wants the limit raised, and recently asked HM Treasury to consider increasing the maximum amount that can be paid using contactless cards from £45 to £100.

But although the economic benefits of raising the contactless payment method are plain to see, there are security fears. Fingerprint sensor technology embedded in cards could overcome this limit and boost spending.

UBS said: “Despite the rise of mobile payment threat to the total cards volume, we believe biometric cards can fuel some growth within the payment cards market.”

The bank said biometric card payments could add $5bn to the global banking sector by 2026.

In increasing demand for higher-value contactless payments, the Covid-19 pandemic has stimulated tech activity within banks.

For example, last June, French bank BNP Paribas brought forward a project to add biometric authentication to contactless payments as challenges brought by Covid-19 proved the technology’s worth.

The bank’s Visa card can store fingerprint information. While customers will still be able to make contactless payments up to the spending limit without the fingerprint, they will also be able to make higher-value contactless payments using the new card.

Speaking at the time, Jean-Marie Dragon, head of electronic money and innovative payments at BNP Paribas, said: “This is a project that we had started before the coronavirus, but [the virus] has speeded up the trend of contactless usage, so this product has become even more needed.”

In the Nordics, OP Financial Group, working with service provider TietoEVRY, is testing biometric payment cards that combine contactless and fingerprint verification.

OP said more than 60% of payment terminal transactions made by its customers using OP cards are contactless, but it wants to give added security so that users can make higher-value payments.