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Biometric Authentication to Mitigate Payment Fraud

By Enterprise Security Magazine | Friday, November 30, 2018

Biometric Authentication One of the main challenges faced by the payment card industry is fighting frauds. Payment card fraud has been a major issue for an extended period of time, and the steps currently taken to stop it are not effective enough. A report by Financial Fraud Action UK (FFA UK) reveals that fraud across payment cards, remote banking, and cheques totaled a whopping 768.8 million pounds. The majority of this fraud involved payment cards; there was a significant increase in the proportion of cards lost and stolen, which collectively accounted for a total loss of 96.3 million pounds. However, today with the introduction of biometric authentication, the impact of fraud has been significantly reduced. Biometric authentication uses unique identification features like fingerprints and voice of users for access.

Today’s payment systems utilize two-factor authentication as the primary security feature. While two-factor authentication is a secure measure, it has several possible issues: cards can be stolen and cloned using skimmers, or passwords can be hacked. These risk factors are always present, and even the recent technology—EMV chip cards—can’t stop hackers. But, this is where biometrics comes in. Biometric authentication uses a physical characteristic that is unique to each user to verify their identity. The most commonly used are fingerprint, face, iris, and voice recognition. Biometrics adds an additional layer to security, reducing the potential for fraud. There are several advantages of biometrics: easily accessible and chances of false negatives or false positives are very low.

Several major payment providers and technology companies like MasterCard and digital wallet creators like Apple and Samsung are coming up with innovative solutions in biometric payment authentication. For example, MasterCard rolled out “Identity Check” that eliminates the need to remember passwords and reduces digital checkout time. Consumers can use this verification measure with a fingerprint scanner on their phone or through facial recognition. Similarly, companies like Apple, Samsung, and PayPal that offer mobile payments have already implemented biometrics in their respective devices.

Like every other new technology, biometric authentication also has certain disadvantages. For example, in case a user’s mobile phone gets stolen, their recorded voice and selfies can be easily be used for biometric authentication. However, if payment providers and technology companies resolve these issues and build consumer confidence, the widespread adoption of biometrics is inevitable and will be the future of mobile payments.

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