Transactions that use biometrics, including facial and fingerprint recognition, to authenticate remote mobile payments are forecast to reach US$1.2 trillion globally by 2027.
According to Juniper Research, this growth of 365% is driven by recent regulatory changes, with the introduction of SCA (Strong Customer Authentication) pushing greater adoption.
The Juniper paper, Mobile Payment Biometrics: Key Opportunities, Regional Analysis & Market Forecasts 2022-2027, identified OEM (Original Equipment Manufacturer)-Pay solutions as a driver of mobile payment biometrics adoption. The report urged OEM-Pay vendors to use their influence over smartphone design to enhance built-in biometric systems within devices and ensure that security is maintained as new threats emerge.
A biometric future
The Juniper paper, Mobile Payments ~ A Biometric Future, posits that “there will be a transitionary period over the next three to five years, where passwords begin to be phased out in favour of biometric authentication solutions; giving time for consumer trust in biometrics to rise further.”
According to Juniper Research payments and identity are merged elements, the use of a data ecosystem is the key to secure payments, with no one area being the weakest link.
Juniper also believes that payment authentication standards from organisations, including GSMA Mobile Connect, the Secure Identity Alliance, and FIDO, need to be unified across the payments ecosystem.
The analyst says the unification process has already begun, with even competitive vendors working together to solve the security-usability issue, developing strong partnerships to ensure that; making all forms of mobile payments achievable.
SCA critical to market growth
To meet the SCA requirement of PSD2 (Second Payment Services Directive), financial institutions are capitalising on smartphone biometric authentication capabilities, accelerating the technology’s adoption.
The research found that the volume of biometrically authenticated remote mobile payments will grow by 383% over the next 5 years, reaching 39.5 billion globally by 2027.
Financial institutions are implementing step-up authentication to maintain trust and reduce fraud, where certain transactions are escalated for biometric approval based on risk scoring. Therefore, vendors must offer multiple ways to authenticate and develop new techniques to keep biometrics secure.
Pay with your face
Juniper Research says facial recognition is paving the way for greater adoption of biometrics in mobile payments, with OEM-Pay solutions leveraging the near-ubiquity of facial recognition capabilities to provide frictionless checkout experiences for customers.
With the use of facial recognition increasing, the technology has become a target for malicious actors using advanced spoofing techniques, such as digital injection attacks. In response, mobile authentication vendors must prioritise the design and implementation of enhanced liveness detection, and anti-spoofing techniques, to combat the ever-evolving role of fraudulent players and ensure that security is not compromised.
Adoption of facial recognition will not be universal, however, until issues around privacy protection and the selling of facial information are resolved.
