Biometrics

View on biometrics for cards

by Mark Rowe

Several technology companies are preparing to roll out biometric fingerprint-activated credit and debit cards on a global scale, including Zwipe, Visa and SmartMetric. Monica Eaton-Cardone, co-founder and CIO of the risk management firm Global Risk Technologies, believes biometric technology has the potential to transform the card payments industry by preventing fraudsters from using stolen cards. However, while fingerprint-activated credit cards are designed to thwart point-of-sale fraud, She emphasises that it’s equally important to develop biometric safeguards for card-not-present (CNP) transactions.

Card fraud reportedly contributed to $16.31 billion in losses worldwide in 2014, including losses incurred from counterfeiting, CNP fraud, fraudulent application, and lost and stolen cards. Predictions for 2020 suggest that global card fraud will exceed $35.54 billion.

In an effort to reverse those steadily increasing fraud losses, Zwipe and MasterCard partnered in 2014 to launch a biometric contactless payment card with integrated fingerprint sensor after a pilot with Norway’s Sparebanken DIN. Last September, Visa announced its trial of a new biometric card design based on the EMV chip standard, which supports match-on-card authentication using a biometric reader at ATM terminals. And at last month’s Smart Card Alliance Payments Summit, SmartMetric debuted its EMV-compliant biometric credit card, which uses a sub-micro fingerprint reader within the card to verify the user’s identity and activate the card.

Eaton-Cardone said: “Technology is evolving at a rapid pace to address rising credit card fraud. EMV chips have helped thwart counterfeit cards, and biometric technology can prevent fraudsters from using stolen cards—it’s no longer simply a matter of forging a signature or hacking a PIN. Fingerprint validation can be a very effective way to combat point-of-sale fraud, and it’s already being used with smartphone digital wallets, such as Apple Pay. Yet with a growing number of criminals turning to CNP fraud, the industry urgently needs to provide biometric safeguards for online transactions.”

While newer smartphones and the next generation of biometric cards may have a built-in fingerprint reader, fingerprint verification is not compatible with older phones, laptops or desktop computers. Because of these limitations, Eaton-Cardone calls for developers to create and implement other biometric verification tools that can be used with existing devices to combat CNP fraud. Since most mobile devices and many computers have an integrated camera and microphone, she considers facial recognition and voice recognition to be promising options.

“The ability to embed miniature fingerprint readers within a credit card is an exciting development. However, I believe the payments industry could benefit substantially by leveraging existing facial recognition and voice recognition technologies to enhance the security of online transactions. Evidence suggests that EMV chip cards have already started driving a greater proportion of credit card fraud to the online channel, so it’s important to act quickly to improve the security of online transactions. To succeed in reducing overall losses, developers must broaden the application of biometric technology to combat all types of card fraud.”

Visit www.globalrisktechnologes.com.

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