As EMV chip-and-PIN payment card technology spreads to new markets, an Argentina technology company sees opportunity in developing a biometric fingerprint-scanner to replace personal identification numbers for card authentication.
Buenos Aires-based SmartMetric Inc. in late September announced plans to introduce a fingerprint-activated credit card during the first quarter of 2012.
The fingerprint scanner built into the card, which uses biometrics technology commonly used for identifying people through physical traits, enables verification of the identity of a cardholder in less than 60 seconds, SmartMetric CEO Colin Hendrick tells PaymentsSource.
“Ten years of research went into this technology and we have reduced the electronics to such a point that a complex fingerprint scanner/sensor can be part of a credit card,” Hendrick says.
Hendrick forecasts that within a couple of years EMV card technology will be more widespread in the U.S. Certain major issuers this year announced plans to introduce EMV cards for frequent overseas travelers, and Visa Inc. on Aug. 9 announced incentives for merchants and issuers to adopt the technology over the next several years (
“In two years, the EMV card will be the dominant card (technology) in the United States as well,” Hendrick predicts. “The PIN is the least secure part of a chip-and-PIN card, and the fingerprint provides the highest security.”
The fingerprint processor imbedded in the card resembles a “sliver of silicone,” making the card no larger than standard credit cards at 86-by-54mm nor thicker than an EMV card, ranging between 0.3mm and 0.76mm, Hendrick notes.
The card is designed to be used at any point-of-sale terminal or ATM, which would not need a scanner or reader because all of the scanning technology is in the card, Hendrick says.
SmartMetric is in discussions with Visa Europe, Visa Inc. and MasterCard Worldwide, as well as other card brands, as part of its efforts to make the fingerprint card available to issuing banks, Hendrick adds.
Even though the card may be more expensive for banks to issue than certain existing cards, issuers could view it as a tradeoff on the money saved by avoiding potential fraud, Hendrick suggests.
“Some banks we speak to are considering issuing it as a premium card, with maybe a $50 to $60 annual fee, or something in that range,” Hendrick says. “But after some time, I believe this will be standard technology in the banking industry with minimal fees.”
One industry analyst says fingerprint-activated credit cards could provide more security, but the technology might actually make its widespread acceptance more difficult.
“SmartMetric could make a good argument that it would be the ultimate security, but a lot of people in the payments channel would have to buy into this,” Brian Riley, senior research director and analyst with Needham, Mass.-based TowerGroup, tells PaymentsSource.
In addition to following credit card standards on where a chip can be placed on a card, the fingerprint card would also have to provide its own power source, because it is not reliant on the payment terminals to read the fingerprint scan, Riley says.
“People are used to using credit cards quickly, and this has the potential to slow down that process,” Riley contends.
“Plus, what is the fault factor if you don’t get a good print on the first try?” Riley asks.
SmartMetric is building a manufacturing plant in Latin America in order to produce the new technology, which accepts the cardholder fingerprint with a “one-read-only” scan, then stores it for verification when the cardholder puts his fingerprint on the scanner when activating the card for use, Hendrick says.
The company also intends to develop a medical card with fingerprint technology that would store a patient’s medical records for use in an emergency. Any smartcard interface on a computer or laptop in a hospital emergency room would be able to read the chips in the medical records card, Hendrick adds.
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