With the advent of numerous new technologies in payments, biometrics has taken a lead in authentication processes and accessibility.
According to
Global Market Insights, the biometric payment market was valued at $8.83 billion in 2023, and is expected to grow around 17.1% between 2024 and 2032.
Biometric cards have further become a trend amongst payment platforms, with companies such as
JP Morgan piloting biometric payments platforms in the US. In the announcement for the platform earlier this year, the company stated that they are committed to biometric technology development, collaborating with PopID to roll out pay-by-force payments
with merchants on a testing and trial basis earlier this year.
Speaking to Anette Trulsson Corda, SVP market development at IDEX Biometrics, Finextra gained insight to how biometrics can bolster financial inclusion and sustainable opportunities in the financial sector.
Other payments giants and major banks have also announced plans to issue biometric cards that encourage further contactless payments that require only fingerprint authentication, such as Turkey’s
Garanti BBVA in collaboration with Mastercard. Corda also states that Mutual Trust Bank in Bangladesh is releasing biometric payment cards, and TaluCard in Europe produces biometric cards targeted to aid the elderly and visually impaired.
Other banks are also including biometric technology in their operations, such as
Tesco Bank which uses biometrics in their onboarding processes.
Financial inclusion
Biometric payments provide opportunities for the unbanked and underbanked to become integrated into the digital financial industry and access essential digital payments. The accessibility element of biometrics can help reach those who have difficulty joining
the financial industry due to illiteracy, displacement, and disability.
Corda states that a third of adults globally are unbanked, which amounts to 1.4 billion people.
She further details: “When it comes to biometric technology, global research is showing that biometric payment solutions are appealing across age groups, geographies, and demographics. We observe interest levels above 80% across markets, reaching 90%+ in
countries such as India. That’s because biometric payment cards strike the right balance between security in a world of increasing fraud and cybercrime, with the demand for frictionless payment experiences. Biometric payment cards also benefit from being totally
off-cloud since customer information is encrypted and securely held in the chip of the card. There is also a clear consciousness around data integrity, and consumers are looking for data-privacy-compliant solutions, such as biometric payment cards, where the
encrypted fingerprint template can’t be reverse-engineered and linked back to a person.”
Sustainability in biometrics
Biometric payments can boost sustainability through the slow movement away from physical cards that can eliminate further material waste. Corda adds that biometrics can push players to rethink their supply chains and move towards more eco-friendly operations
within the biometric sector and biometric sensor market.
“Amid this speed of sector growth, industry players need to take strides in differentiating and taking proactive steps to implement sustainable ESG initiatives. This involves eco-friendly production processes and sustainable card materials as a default strategy.
It also includes considerations around manufacturing locations, bringing production centres and supply channels closer to key markets to reduce the overall carbon footprint, and implementing thorough recycling strategies,” Corda states.
Corda continues that biometrics can change the payments ecosystem by altering the patterns in which payments are transacted and how they operate. She adds that biometrics can progress beyond payments into being overall more beneficial to businesses and livelihoods.
“In the future, we expect to see the benefits of biometric technology continue to expand beyond payments. In other words, consumers will be able to combine payments, loyalty cards, transport, and personal ID into one single biometric card, removing the need
for multiple forms of access and authentication and closing the inclusion gap even further.
“Many young people are aware of and understand the need to take a holistic approach to sustainability with a willingness to adapt their overall consumption patterns, opting for solutions that combine low environmental impact, durability, and social responsibility.
This was highlighted during the recent UN General Assembly and the Global Youth Mobilisation initiative.”
Concerns in the biometrics sector
While there are many benefits to the boost in biometric technology and the predicted growth of the biometric payments market, there are also significant concerns.
Biometric technology come with serious concerns about user privacy and sharing of personal data. I wrote about the
regulation in place for biometrics and data privacy earlier this year.
Furthermore, when it comes to sustainability and energy efficiency, biometric technology and
AI-powered software are energy-hungry, which has serious implications for the environment and carbon emissions.