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Biometric Payment Cards – Are we there yet?

By October 28, 2019

2019 has witnessed intense activity in the development of biometric payment cards with many pilots running around the world.

2020 is seen by many as a breakout year for biometric payment cards with pilots turning into commercial rollouts and these next generation payment cards beginning to be delivered to potentially millions of people across the world. This includes the recent announcement by NatWest bank in the UK of the world’s first biometric credit card pilot with 150 customers.[i]

As an analyst company that specialises in high-growth areas of identity, authentication and biometrics, at Goode Intelligence we first investigated the market opportunity for biometric payment cards in 2015 and again in 2018 in the first and second edition of our Biometrics for Payments analyst report.[ii] We predicted low volumes of cards initially as card issuers tested out the technology with pilots, ramping up to almost 579 million cards for 2023. We’ll be refreshing these forecasts in 2020 based on the latest data and input from all parts of this ecosystem, in the meantime here are some insights of how the market has moved along over the past year.

Our analysis in 2018 determined that there are a number of hurdles to overcome before biometric payment cards can be shipped in their millions. This includes cost, including the question of who pays for the card, scheme certification and enrolment.

As one of the hottest topics in biometric payments, we’ve naturally built biometric payment cards into our next biometric event – Biometric Summit London 2019. We’re delighted to have three vendors that are active in biometric payment cards, IDEX Biometrics, Precise Biometrics and an exciting new entrant, Riot Micro, speaking at the event to share their thoughts and vision on this and other relevant topics with our delegates.

I interviewed each of them recently to get their insight on where we are currently with biometric payment cards.

IDEX Biometrics

I caught up with David Orme, SVP Sales and Marketing at IDEX Biometrics to get the latest insight into how the market is currently taking shape.

I asked Orme what the current status was.  He explained that as “biometric technology is already influencing our lives with smart phones and airport terminals etc, the next evolution is with payment cards. We are in the market building phase at the moment with many pilots either concluding or being introduced.”

Orme provided us with some insight into IDEX Biometrics’ latest developments saying, “there is expectation that multiple partners will achieve certification completion for their biometric card that will result in a production order ramp up.”

One of the areas that Goode Intelligence has identified as being critical to the success of biometric payment cards is remote enrolment and Orme informed me that IDEX Biometrics has been very active in developing solutions for this with “remote enrolment patents in many territories around the world and a recent patent license agreement with global card manufacturer IDEMIA.”

Orme also referenced three other major hurdles that need to be overcome to ensure the success of biometric payment cards including “educating consumers and financial institutions on its value and ability to combat fraud”, “the cost of a biometric payment card and who’s responsibility this is” and “addressing common misconceptions such as where the data is stored”.

With high numbers of pilots being concluded in 2018 and 2019 Orme believes that biometric payment cards “will be in mass-market usage by 2020”.

Precise Biometrics

In a discussion with Stefan K. Persson, CEO, Precise Biometrics I asked him where biometric payments cards are in their development lifecycle, Persson’s reply was that “Biometric contactless cards are now getting more mature now and are not the same novel technology as 18 months ago. It’s widely recognised that they bring security at no expense of user convenience and card schemes are increasingly active in certifying these cards, which means the timeframe for commercial adoption is getting quite close now.”

With many pilots taking place in 2019 I asked Persson what this meant to shipment numbers as we approach the end of the current year. “We are involved in a number of pilots with our partners now, including NXP with whom we also have achieved the first Mastercard CAST certification. It’s important that all our quality and convenience criteria are met so we envisage small volumes through the rest of 2019 with a gradual ramp-up in 2020.”

Strong security is vital to payments and ensuring that biometric matching and storage of biometric templates takes place in a secure piece of hardware on the card is important. Persson discussed the importance of this and provided insight into a pilot that they were involved in run by Crédit Agricole in France.

“One noteworthy pilot that we are involved in through our partnership with NXP is the Crédit Agricole and Mastercard trial of G+D’s biometric card (showcased at Money 20/20 Europe earlier this year) with an integrated fingerprint sensor using NXP’s platform featuring Precise’s technology. This card is one of the first with a very strong combination of features requested by the payment eco-system as the NXP platform is based on a contactless card, using the NFC field only without a built-in battery. Most importantly, in addition to delivering enhanced customer convenience, the card is highly secure as the biometric matching and storage of the biometric templates takes place in a secure element (a secure chip in the card).”

Riot Micro

Riot Micro is an exciting start-up that I had the pleasure of meeting at MWC 2019 earlier this year in Barcelona. Riot Micro is a fabless semiconductor headquartered in Vancouver Canada with offices in US and Switzerland and development sites in Egypt and India. Their technology has been incorporated into an ISO compliant cellular biometric card (CBC).

I talked to Abdallah Turki at Riot Micro to get his opinion on where we are with biometric payment cards; “I believe that Biometric cards are gaining recognition as the most effective and seamless method of making secure payments, I expect 2020 will be the year were when financial institutions and others will take a more serious look at implementation approaches, the rise of data breaches as highlighted by the recent event effecting BA and Marriott makes taking [steps] to protect data more urgent than ever.”

Turki provided me with an update on where his company currently is with the development of its cellular biometric cards and plans for 2020; “Riot Micro has committed to delivering a cutting edge cellular technology enabling a disruptive and seamless payment technology. At MWC 2020 we will be showcasing the ISO compliant credit card that has multiple use cases and I am glad to announce that we have signed the second bank for our CBC and are in serious discussions with multiple FinTechs who are exploring multiple product launches.”

There are still challenges to the commercialisation of biometric cards and Turki acknowledges this, “Scalability and manufacturing of cards with complex components remains challenging however with advances in the manufacturing process these challenges will be overcome”.

Cellular biometric cards are following the wake of the success of standard dual-interface biometric cards and Turki suggests that “the first cards, purely online banking cards” will be available “by the end of Q4 this year” with the “prototype ISO compliant credit cards showcased at MWC 2020” with “commercial launches expected by end of Q4 2020.”

I would like to thank IDEX Biometrics, Precise Biometric and Riot Micro for their contribution to this article. All three companies will be involved in the Goode Intelligence organised Biometric Summit London 2019 and will be on-hand to answer any questions that you may have on the next evolution of payment card technology.

To register for this event please follow this link.

Thank you. Alan Goode, CEO and Chief Analyst, Goode Intelligence.

 

[i] https://www.rbs.com/rbs/news/2019/10/natwest-first-uk-bank-to-unveil-biometric-credit-card.html

[ii] https://www.goodeintelligence.com/report/biometrics-for-payments-market-technology-analysis-adoption-strategies-and-forecasts-2018-2023/