One of the ironies of the post-pandemic payment card environment is that fingerprint-based biometric cards that failed to gain broad adoption decades ago because they seemed overcomplicated are now gaining traction.
The newest versions of these cards, which use fingerprints instead of PINs to authenticate users, now sport contactless technology that gained significant momentum during the pandemic when consumers also wanted to avoid touching payment terminals or cash.
A smattering of banks in Europe, Latin America and Asia are pitching their customers biometric contactless cards as superior to chip-and-PIN cards — which are standard in those markets — because the fingerprint eliminates the need to remember a PIN or risk having someone intercept it at the checkout.
In part because the majority of card fraud now occurs online, analysts are skeptical about whether biometric cards will take hold in the U.S. or even much more widely in other markets.
“I still see the relatively high cost of biometric cards being a big obstacle to mass adoption,” said Julie Conroy, head of risk insights and advisory at Aite-Novarica. Biometric cards
But many have been surprised by the post-pandemic popularity of biometric cards, said Michel Roig, head of payment and access at Fingerprints, the Swedish biometrics firm that provides software and other technology for several fingerprint-based biometric card pilots and rollouts around the world.
“They’ve been saying cards are doomed to die for 20 years, but surveys continue to show that even though mobile payments are gaining ground, cards are still preferred by consumers — and this is likely to be the case for another 10 or 20 years,” Roig said.
In the wake of the pandemic, contactless technology gave biometric cards fresh life, because the technology improves security and convenience in markets where most transactions over $50 still require a PIN, Roig said.
Biometric card technology has also improved in the last few years, he said, noting that the encrypted fingerprint data never leaves the card and the enrollment process at bank branches is simpler through software kits banks can easily implement.
“The biometric card removes friction, and both banks and consumers like that,” he said.
India, Morocco and Jordan are among the latest countries to add biometric payment cards, with Moroccan Bank for Commerce and Industry and Jordan Kuwait Bank both offering fingerprint-based biometric debit cards to affluent customers. India’s Transcorp recently announced it’s adding a biometrics-based prepaid card that's aiming to reach the 940 million active card users in the country.
The Mexican subsidiary of Spain’s BBVA last year began a test of Visa-branded biometric cards that's ongoing, while France’s BNP Paribas offered all of its bank customers the option to switch to a Visa biometric payment card for a fee of 24 euros ($24) a year.
Two months ago another French bank, Credit Agricole de Lorraine, launched a Mastercard-branded biometric card to its customers as an upgrade.
Fingerprints, whose technology underlies several of these implementations, has been working with a variety of other technology providers, including Paris-based Thales, to advance biometric cards’ features over the last couple of years, Roig said.
Fingerprints has had some discussions about advancing biometric cards with U.S. banks, which Roig declined to name.
“We’ve talked a little bit to banks in the U.S., but they’re interested in it for different reasons,” Roig said. Possible use cases in the U.S. included deploying biometric cards for stepped-up security for certain higher-risk transactions.
Conroy doesn’t foresee a strong use case for biometric cards in the U.S., because the U.S.’s EMV chips block most counterfeit card fraud. Other types of scams, such as online payment fraud, would not benefit from biometrics in the physical card.
“Most issuers are relying on [3-D Secure] protocol for Strong Customer Authentication [required in Europe] as well as other security step-ups available via 3DS,” she said.
Other observers say that Apple’s plan announced earlier this year to enable iPhones to accept payments from contactless cards and other devices will further accelerate growth of mobile payments. Though cards aren't going away anytime soon, their use isn't likely to expand.
“We’re going to see more app-based payments at the point of sale,” said Alisa Ellis, global head of innovation and emerging products at Discover Financial Services, during a presentation on
