Banking and finance is evolving at a rapid pace with constant innovations happening across the globe. One such innovation that is turning heads is the introduction of biometric cards that can verify identity using fingerprints or facial recognition. These next generation cards have the potential to make transactions more secure while providing a seamless user experience.

How do biometric cards work?

Biometric cards work by storing your fingerprint details or facial image inside the chip of the card. When you need to authenticate a transaction, the card reads your fingerprint or captures your face through the card reader. It then matches this biometric data with what is stored inside to verify if you are the actual card holder.

The chip in the card contains your identification details as well as the biometric template. During authentication, the reader takes a live biometric sample from you and runs it against the template for matching. Most cards can store up to two fingerprints or one facial image for added security. If a match is found, your identity is confirmed and the transaction goes through.

Benefits of using biometric cards

There are several advantages that biometric cards provide over regular chip-based credit or debit cards:

- Increased Security: Biometrics makes identity theft very difficult since no one can duplicate your fingerprints. Even if the card is lost or stolen, it cannot be misused without your biometrics.

- Convenience: With biometric cards, you no longer need pins or passwords for verification. A quick fingerprint scan is enough to prove who you are and make secure payments. This leads to faster transactions.

- Reduced Fraud: Since the card needs to match your live fingerprints with the template each time, fraudulent activities are almost impossible. This significantly brings down payment fraud and card misuse.

- Enhanced User Experience: Biometric authentication offers a seamless one-touch payment experience without having to remember or enter complex passwords. Customers find it more convenient than traditional verification methods.

- Meets Regulations: Many countries now require two-factor authentication for financial transactions and payments. Biometric cards satisfy these regulatory needs since they require ‘who you are’ as well as ‘what you have’.

- Future Proofing: Biometric technology is advancing rapidly. Storing this data on cards ensures they can easily be used with next generation readers without needing any updates. The cards remain future ready.

Issues with biometric cards

While Biometric Card  offer clear advantages, there are still some challenges that need to be addressed:

- Security of Biometric Data: Storing fingerprint details introduces the risk of biometric data being stolen or leaked. Hackers can misuse this sensitive information for identity theft if databases are compromised.

- False Rejects and False Accepts: Fingerprint and facial recognition algorithms still have room for improvement. Environmental factors like wet fingers can cause false rejects while identical twins may experience false accepts.

- Upgrade Complexities: If the biometric templates or algorithms need upgrading on cards, it poses logistical challenges around replacing millions of issued cards with customers.

- Lack of Standards: There are no universally accepted standards yet around biometric data formats and interchange protocols. Readers need to support multiple proprietary standards leading to issues.

- High Initial Costs: Developing biometric cards requires heavy investment in technologies and infrastructure upfront. Card issuers need to consider return on investment based on projected upgrade cycles.

- Privacy Concerns: Some citizens argue that storing biometric identifiers on widely used cards can potentially threaten privacy if data leaks and is misused at large scale.

Pilot projects and rollouts

Despite existing challenges, many banks and countries have shown growing interest in biometric payment cards. Some notable pilots and real-world deployments include:

- A US startup worked with Mastercard on a 2021 pilot where customers could enroll fingerprint biometric data on mobile and then use the same to make in-store payments through contactless terminals.

- Israel's largest bank, Bank Leumi, partnered with fingerprint sensor supplier Fingerprint Cards to issue biometric credit cards to approximately 1000 customers in 2019.

- Germany's major bank Deutsche Bank tested biometric debit cards featuring fingerprint authentication with 5000 customers in 2018 across various POS terminals.

- In 2021, one of France's largest banks BNP Paribas conducted its own pilot of biometric payment cards equipped with fingerprints and facial recognition.

- Nigeria became one of the first countries to roll out biometric National Identity Cards to its citizens in 2011 which could also function as payment cards.

As more use-cases emerge, costs come down and technology matures, biometric payment cards are expected to become mainstream globally over the next 5 years. Barring any major security breaches mishandled, they have the potential to revolutionize how we pay.

biometric cards fuse physical payment instruments with digital identification through fingerprints, facial recognition or other biometrics. When implemented securely and backed by appropriate regulations, they can significantly enhance transaction security over current verification means. Major challenges around standardization, biometric data protection and upgrade processes still remain but ongoing industry efforts are steadily making progress. Looking ahead, biometric cards will redefine the payment experience through convenience and one-touch authentication.

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