Payments in a Heartbeat: The Next Phase of Biometrics

The technology vendor Nymi is drawing the attention of major companies like MasterCard and TD Bank, which are testing its contactless payments device that authenticates users by detecting their heartbeat.

The first actual Nymi heartbeat payment took place in July as part of a pilot by TD and MasterCard, Nymi announced August 11. More than 100 bank staffers in Toronto, Regina and Ottawa are testing Nymi's biometric model this summer, and other participating Canadian banks will launch pilots later this year, Nymi said. The TD pilot currently includes only employees, though the other tests will also involve consumers.

The company authenticates users by their heartbeat, and contactless Near Field Communication payments are executed by using a wearable band that's activated and matched to its user.

"Your ID can be present on your wrist for as long as you are wearing your wearable device," said Shawn Chance, vice president of marketing and business development for Nymi, which changed its name from Bionym last year.

Nymi anticipates these pilots will cover more than 90% of Canadian retailers, and should result in thousands of additional transactions as part of the tests. Nymi is also part of a heartbeat biometric test at RBC.

The path to improved security isn't just through the heart. Issuers and merchants are worried about balancing authentication and user experience, and increasingly, biometric technology is seen as the common ground.

Apple is using Touch ID fingerprint authentication for Apple Pay, and Google is planning a similar system for its upcoming Android Pay mobile wallet. MasterCard has partnered with Zwipe to place fingerprint authentication on payment cards, and Fiserv is working to deploy Fujitsu handprint scanners in bank settings.

At the same time, wearable technology is getting fresh attention from financial services providers. Intuit, PNC, PayPal, Apple and Disney are each pursuing their own strategies for blending wristbands and smartwatches with payments.

The consumer's heartbeat, detected through a wristband, is both efficient and reliable as an identifier and payments device, Nymi contends.

"It allows for new types of experiences and you don't have to authenticate yourself every time you make a payment," Chance said.

In addition to its work with Canadian banks, Nymi also works with FitPay, which offers a payments bracelet.

But to succeed in the market, such a device needs to be functional at a wide variety of venues and for a number of different use cases, said Thad Peterson, a senior analyst at Aite Group.

“If the technology was embedded in a watch or a fitbit-like device where there’s more utility than just enabling payments and access, then it would make sense to wear,” Peterson said. “It’s all about removing friction in a transaction, but I’m not sure that a lot of people are going to be willing to wear a fashion accessory to make it happen.”

In wearables, there is still a lot of testing being done to determine whether a smartwatch, wristband or even a pair of gloves is the best fashion accessory in which to embed payments.

"There are so many wearables it is becoming hard to keep up with them all," said Shirley Inscoe, a senior analyst at Aite Group, adding wearables used for payments should have secure data transmission and not be easily spoofed like telephone lines and IP addresses. "Just because a product claims it can be used for payments doesn't ensure it should be used for payments … [but] wearables certainly seem to be the next step."