Singapore: a testbed for biometric payments

Con­ve­nience at the touch of a but­ton is the mantra for ser­vices you can order through your phone. Whether it’s taxis or food deliv­ery, there’s an app to bring it to your doorstep. Now the bio­met­ric pay­ments sec­tor is catch­ing up.

Bio­met­rics can break bar­ri­ers and pro­vide finan­cial ser­vices to those peo­ple who can’t read, write or have dis­abil­i­ties

Increasing interest in biometric payments

The world leader is Sin­ga­pore where 61 per cent of finan­cial com­pa­nies have adopt­ed or are in the process of adopt­ing bio­met­rics, accord­ing to a sur­vey by iden­ti­ty data intel­li­gence com­pa­ny GBG.

A study by Visa in Sin­ga­pore found that 88 per cent of those sur­veyed had used fin­ger­print bio­met­rics, while 56 per cent had used facial recog­ni­tion, and 50 per cent and 49 per cent respec­tive­ly had used iris scan­ning and voice recog­ni­tion. Mas­ter­card has tri­alled a “self­ie pass­word”, but in Sin­ga­pore the most pop­u­lar type of bio­met­ric pay­ment is fin­ger­print.

Tomasz Kur­czyk, chief trans­for­ma­tion and dig­i­tal offi­cer at AXA Insur­ance in Sin­ga­pore, says the use of fin­ger­print scans at air­ports has con­tributed to its pop­u­lar­i­ty in oth­er sec­tors. “All res­i­dents trav­el­ling in and out of Sin­ga­pore use auto­mat­ed pass­port con­trol gates with fin­ger­print-based authen­ti­ca­tion,” he says. “This defin­i­tive­ly dri­ves con­fi­dence in gen­er­al pub­lic accep­tance of bio­met­ric tech­nol­o­gy.”

Indeed, the Visa study found that 97 per cent were inter­est­ed in using bio­met­rics and 96 per cent were com­fort­able using such meth­ods to make pay­ments. The most pop­u­lar rea­sons for using bio­met­rics were per­ceived con­ve­nience and speed.

The benefits of biometrics

A start­up mak­ing waves in the bio­met­ric pay­ment space is Touché, which pro­vides fin­ger­print scan­ning devices and a cloud-com­put­ing ser­vice that stores cus­tomer data. As well as stream­lin­ing the pay­ment process, Touché offers busi­ness­es per­son­alised, detailed data for mar­ket­ing cam­paigns and loy­al­ty man­age­ment schemes.

The com­pa­ny has part­nered with OCBC Bank in Sin­ga­pore and Mashreq Bank in the Unit­ed Arab Emi­rates, and has its sights even fur­ther afield. Japan is plan­ning to imple­ment bio­met­ric pay­ments in the run up to the 2020 Olympics as it pre­pares for an influx of up to 40 mil­lion vis­i­tors.

Touché’s tech­nol­o­gy works by users scan­ning two fin­ger­prints on a device that is pro­vid­ed to mer­chants for free; ven­dors have to pay a month­ly sub­scrip­tion fee for the cloud-com­put­ing ser­vice that stores the data. The user’s fin­ger­prints are linked to cred­it card infor­ma­tion and shop­ping his­to­ry. This is espe­cial­ly use­ful for the tourism indus­try when trav­ellers face pos­si­ble prob­lems using their cred­it cards or mak­ing for­eign-cur­ren­cy trans­ac­tions abroad.

Fingerprint scanning not without pitfalls

Hav­ing all your pay­ment infor­ma­tion lit­er­al­ly at your fin­ger­tips is con­ve­nient and saves hav­ing to car­ry around dif­fer­ent cards. But it is not with­out poten­tial pit­falls.

“We need to remem­ber that we can change our cre­den­tials, for exam­ple a pass­port, but once your bio­met­ric data is leaked, we can’t mod­i­fy it,” warns Mr Kur­czyk. He cites pre­vi­ous data breach­es from tech­nol­o­gy com­pa­nies as a rea­son why con­sumer trust in bio­met­ric authen­ti­ca­tion might be lim­it­ed.

“Bio­met­ric data must be treat­ed as the most sen­si­tive lev­el of per­son­al data,” says Shirish Jain, pay­ments direc­tor at Strategy&, the strat­e­gy con­sult­ing arm of PwC in Sin­ga­pore. Mr Jain says encryp­tion, tokeni­sa­tion, con­trols and mon­i­tor­ing are espe­cial­ly impor­tant when it comes to bio­met­rics.

Touché points out that all its data is encrypt­ed, but for users in coun­tries where fin­ger­print scan­ning is not already ubiq­ui­tous, there might be chal­lenges in con­vinc­ing peo­ple to link their finan­cial and bio­met­ric data. How­ev­er, a 2019 study by the UK’s Nation­al Cyber Secu­ri­ty Cen­tre found that 23.2 mil­lion accounts that had been hacked used the pass­word “123456”, which sug­gests many peo­ple already prize con­ve­nience over secu­ri­ty.

Implementation still in progress

Gar­ner­ing inter­est in bio­met­ric tech­nol­o­gy is one thing, but actu­al­ly mak­ing bio­met­ric pay­ments a real­i­ty is anoth­er. Mr Kur­czyk notes: “In coun­tries where there is a high pen­e­tra­tion and adop­tion of card-based pay­ments, there is a lim­it­ed cus­tomer ben­e­fit improve­ment poten­tial to jus­ti­fy the invest­ment in bio­met­ric tech­nol­o­gy over sim­pler solu­tions, such as QR codes.”

But for many, fin­ger­print pay­ment is eas­i­er than more com­plex tech­nol­o­gy. Mr Jain says that because bio­met­ric pay­ments do not man­date tech­ni­cal lit­er­a­cy, they could be of ben­e­fit to peo­ple in “dig­i­tal finan­cial iso­la­tion”, espe­cial­ly in less devel­oped nations with lim­it­ed access to banks or ATMs.

Brad Jones, chief exec­u­tive of Wave Mon­ey, a mobile finan­cial ser­vices com­pa­ny in Myan­mar, agrees. “We think bio­met­rics can be a game-chang­er in a mar­ket where finan­cial lit­er­a­cy is low,” he says. “It can also break bar­ri­ers and pro­vide finan­cial ser­vices to those peo­ple who can’t read, write or have dis­abil­i­ties.”

Even in Sin­ga­pore, bio­met­rics have yet to become ubiq­ui­tous. “I haven’t heard peo­ple talk about it much,” says Nataniel Tan, a Sin­ga­pore­an doc­tor who works in the UK, but vis­its Sin­ga­pore reg­u­lar­ly. “I usu­al­ly pay by con­tact­less, except for the hawk­er stalls, then it’s with cash.” But Dr Tan would be inter­est­ed in using the tech­nol­o­gy: “As a lay­man, I would think it’s safer than hav­ing a card and more con­ve­nient.”