More than face value: how biometric payments are shaping the future of commerce
Amid the accelerating shift to digital payments, consumer interest in biometric authentication payment methods is growing rapidly. Visa’s experience across CEMEA, working with banks and retailers to offer solutions, shows that integration and education are the key to widespread acceptance.
For a shopper in a rush, it sounds like a dream – at some of Russia’s biggest supermarkets, you can now turn up without cash, card or even mobile phone to grab what you need. At the end of your visit, simply tap a specific option at the self-service checkout, show your face to the camera and walk out.1 Yet this and other biometric payment options look set to become increasingly available across the rest of the CEMEA (Central and Eastern Europe, Middle East and Africa) region – Visa is already working with financial institutions and merchants to introduce point of sale (POS) technology that uses biometric authentication, such as facial or fingerprint recognition to provide biometric payment solutions.
Shopping with a smile
In Russia, where mobile wallet vendors and mobile device companies are also building solutions, Visa and Sberbank have, following a grab-and-go pilot last year at a food chain outlet in Moscow, worked with X5 Retail Group, one of Russia’s largest retailers, to launch a pay-with-a glance service across 150 of its supermarkets and several smaller-format stores in March.2 Now, in around the time it takes to carry out a regular bank card transaction, Sberbank clients can select the pay-with-a-glance option at the self-checkout terminal, take off their mask for a moment and look into a high-resolution camera which allows rapid, secure facial recognition to purchase their goods – no card or phone is required to process the transaction.
“We believe that facial recognition payments will soon become one of the most popular ways of shopping in supermarkets, even after the pandemic,” says Michael Berner, Visa’s General Manager for Russia. “Our research3 suggests that this type of biometric identification is gaining traction in Russia, with 70% of our customers planning to rely on face payments going forward.” In line with this, the technology could potentially be scaled up across X5's entire network of over 6,000 self-checkout machines4, with Russia in particular – where only a minority of credit cardholders said they used a unique password for each account – showing substantial room for growth in biometric payments.
Change in this area has - as part of the wider digital transformation in payments - been accelerated by the impact of COVID-19, driven by factors ranging from consumers’ embracing contactless payment methods and ecommerce customers demanding quicker, more frictionless payment solutions, to how the rise in mobile payments has underpinned the need for authentication methods that offer an alternative to traditional, potentially cumbersome passwords.
Here, biometric payments emerge as an attractive, secure and frictionless way to pay – with industry and regulatory developments set to support their usage also. As Paul Fabara, Visa’s Chief Risk Officer, predicts in a recent article for Visa Navigate, the trend away from passwords and other knowledge-based authentication will accelerate with adoption of SCA (strong customer authentication) standards like FIDO, a set of technical specifications developed by industry which are now available in all major browsers and mobile devices. In Europe, Fabara also notes that enforcement of SCA for eCommerce comes into effect this year5, with digital identity among the options available, which could reasonably take the form of government or bank-led schemes which include a biometric element.
So, just what do consumers think about this shift?
Rising consumer interest
In assessing attitudes, Visa commissioned research into 39 markets around the world, including Ukraine, Russia, South Africa, Saudi Arabia, Egypt, Kenya and Nigeria.6 The survey of credit cardholders in the relevant markets before the pandemic showed widespread interest in and growing enthusiasm around biometric payments. The COVID-19 pandemic has further accelerated existing trends with a focus on hygiene and touchless payments. In Saudi Arabia, most of those surveyed (82%) had abandoned an online purchase, due to issues such as not receiving a passcode or other service error, or not having their card present to make the payment; in Russia that figure was 63%, in South Arica 78%, across Egypt, Kenya and Nigeria combined also 78%; and in Ukraine 61%. In terms of consumers already embracing biometric technology, the research found that in Saudi Arabia, at the time of questioning, almost two-thirds of consumers had used biometrics in the past week to make a payment compared to in South Africa and Africa (Egypt, Kenya and Nigeria) where almost half of respondents at the time had used biometrics in the past week to access banking or make a payment. In Ukraine, one in three had made a biometric payment in the past week, while in Russia that figure was two in five.
Consumers see biometrics as more secure, faster, and easier than traditional payment methods, although they communicated that there is room for action around their integration into the payment’s ecosystem and, in tandem, into their everyday lives. The main reasons people gave for not using biometric payments were that their bank and device not using biometrics, or not knowing how to use biometrics themselves. Across all markets, there was more interest in making payments with fingerprints, facial recognition and eye scan than voice recognition, vein pattern and behavioral biometrics – however, some consumers also wanted the choice to use multiple types of biometric payments, which might depending on where and when a transaction took place.7
In Ukraine, Visa has worked with PrivatBank to enable to the first retail shops in Ukraine to use a biometric payment method, named FacePay24.8 The scheme means users, once they have enabled the technology via the bank’s app on their smartphone, can pay for purchases by looking at the camera by the cash desk or at the POS-terminal with the biometric function. “In Georgia we partnered with Bank of Georgia to test biometric facial recognition in the Tbilisi subway system”9 says Vira Platonova, Senior Vice President and Group Country Manager, CISSEE, Visa. “Using this innovative technology in public transport system provides the option of purchasing a ticket and passing through the turnstile in less than a second with facial biometrics. This solution in test format is accessible on trial at Avlabari metro station and with our partner we plan to expand facial recognition payments to 30 more stations in the near future.”
But this is not just a solution for big retail, but a payment method that could be employed everywhere from supermarket chains to independent coffee shops. As Visa found, around half of credit cardholders in Russia and Ukraine – rising to two thirds in South Africa – said they would switch from banks and payment cards that did not offer biometrics.10 To further support this demand, as Visa’s engagement with consumers has found, education is key – including reassurance that personal data will not be used elsewhere, communicating that biometrics can improve security, and using jargon-free language. That might take the form of a media campaign or push notifications to a banking app, to alert users to the service. Choice, too, will be crucial, allowing customers to choose their preferred biometric methods whenever they want. As Michael Berner summarises: “Biometrics are convenient and empower customers to feel secure even if they fail to bring their bank card or forget its PIN code.”
1 Forget Apps, Russia’s X5 And Visa Have Launched Pay With Your Face, March 2021: https://www.forbes.com/sites/markfaithfull/2021/03/10/forget-apps-russias-x5-and-visa-have-launched-pay-with-your-face/?sh=4aec5e18787d
2 X5, Sberbank and Visa roll-out pay-with-a-glance, March 2021: https://www.x5.ru/en/Pages/Media/News/100321.aspx
3 Research commissioned by Visa and conducted by Fabrizio Ward, LLC between January-February 2020, surveying 500 adult bank card holders in Russia.
4 Russian retailer X5 introduces ‘pay with a glance’ technology, March 2021: https://www.retail-insight-network.com/news/x5-retail-biometrics-payment-russia/
5 Visa: 2021 payment security predictions, December 2020: https://navigate.visa.com/europe/navigating-the-new-normal/payment-security-predictions-for-2021/
6 Research commissioned by Visa and conducted by Fabrizio Ward, LLC undertaken across above referenced markets in Q1 2020, surveying a select group of credit card users
7 Research commissioned by Visa and conducted by Fabrizio Ward, LLC between January-February 2020, surveying 500 adult bank card holders in Russia
8 PrivatBank and Visa enabled first retail shops in Ukraine, September 2019: https://en.privatbank.ua/news/2019/9/12/1011
9 Georgia completes trial of face biometric payments for subway system ahead of Japan, December 2019: https://www.biometricupdate.com/201912/georgia-completes-trial-of-face-biometrics-payments-for-subway-system-ahead-of-japan
10 Research commissioned by Visa and conducted by Fabrizio Ward, LLC undertaken across above referenced markets in Q1 2020, surveying a select group ofed 1,000 UK adults aged 18+ who have a credit card
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