7 new uses of biometrics in payments

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Biometric authentication has been around for a while, but companies are still finding new uses for it in payments and commerce. Here are some of the latest developments.

Single sign-on

Biowatch's play is to authenticate a single time for multiple services. It uses a wrist vein reader to scan a person's veins and runs that image against a pre-registered template. Feedback tells the user the authentication is successful, then tells the user to close the clasp on the wearable. When the clasp is closed, the company's technology monitors the clasp to ensure it remains closed.

Biowatch has been gradually attracting attention since its founding two years ago. It recently drew a $1.2 million seed round and a cash stipend of about $35,000 for winning a Visa developer contest at this year's Mobile World Congress, a prize that comes with a significant boost to the startup's visibility and reputation.

An employee demonstrates Samsung Electronics Co.'s Samsung Pay application on a Galaxy Note 7 smartphone with stylus during a media event in Seoul, South Korea, on Thursday, Aug. 11, 2016. Samsung's large-screen Galaxy Note 7 smartphone can be unlocked with an iris-scanning camera. Photographer: SeongJoon Cho/Bloomberg

SeongJoon Cho/Bloomberg

Facial recognition and Samsung Pay

The upcoming Samsung Galaxy S8 smartphone will reportedly use a combination of biometric traits, including facial recognition, to verify users of Samsung Pay. The system, which would also rely on fingerprint and iris detection, is being discussed with some banks ahead of its launch, Bloomberg News reports. Earlier Samsung devices used facial detection to unlock handsets, but never enabled the system for financial applications, the article notes.

Iris-scanning technology using an infra-red camera is demonstrated on a Samsung Electronics Co. Galaxy Note 7 smartphone in London, U.K., on Friday, July 29, 2016. The South Korean company announced the latest iteration of its large-screen smartphone with the 5.7-inch Note 7 that can be unlocked with an iris-scanning camera. Photographer: Chris Ratcliffe/Bloomberg

Chris Ratcliffe/Bloomberg

Iris scanning

Samsung's use of biometrics in its S8 would bring back a feature that was abruptly taken off the market with its last generation of phones. The Note 7 smartphone — which was recalled due to a fire risk stemming from faulty batteries — launched with iris-scanning technology that could identify users by their gaze. If, as has been reported, iris scanning will make a return in the upcoming S8, it would give Samsung a chance to prove the technology's worth for payments and other functions.

Laptop fingerprint reader. Scan any of fingers to log into account.

Predrag Paunovic/kalpis - Fotolia

Retailer's choice

Hypr, a New York-based security company founded in 2014, differentiates itself by letting the retailer choose which traits to authenticate and how many to use at once.

For example, a retailer may require customers authenticate with a fingerprint for a $50 purchase, fingerprint and face for a $1,000-purchase or a combination of five biometric traits for a higher-value purchase.

Hypr doesn’t write any of its biometric algorithms, said Bojan Simic, its chief technology officer — it just writes the security framework.

“We offer all the responsibility in terms of security and encryption of the user’s biometric data and tokenization keys, pick leading biometrics algorithms and plug them into the framework,” he explained. “That way if you're a retailer and want to work with six different kinds of biometrics, you don't have to work with six different companies to do that.”

An upgrade to P-to-P

When Early Warning acquired clearXchange—later renamed Zelle—in late 2015, the acquisition was applauded by banks that make up the P-to-P payments network because it brought Early Warning's various fraud detection technologies into play.

Last year, Early Warning and behavioral biometrics provider NuData Security formed a strategic alliance to further protect the banks' real-time money transfers.

NuData's technology focuses on behavioral biometrics; when screening a transaction, the company's NuDetect platform profiles certain interaction points such as log-ins, account creations, password resets, checkouts and bill payments.

Biometrics only

Newer authentication systems such as fingerprint recognition often fall back on passwords if there is an error, such as a scanner being unable to read wet fingers. Visa wants to change that, eliminating the password entirely from the process.

In collaboration with BioConnect, a biometric identity platform builder, Visa developed a proof of concept of a system that lets users switch among multiple forms of biometric authentication. For example, a user with damp fingers will have the option to use his or her phone's microphone to authenticate by voice, avoiding the phone's keypad entirely.

Selfie Pay

Mastercard Identity Check — commonly known as "Selfie Pay" — is likely to get a boost from renewed interest in the 3-D Secure online authentication system.

Mastercard's new spin on 3-D Secure would replace the older password-based system with facial recognition. Though the system appears on merchant checkout pages, it's up to the issuer to decide which authentication method to use and when to invoke it.

The "Selfie Pay" nickname comes from the process of using a phone's built-in camera to scan the user's face during checkout. Identity Check can also request a fingerprint scan or send a one-time passcode.