In-store biometric payments are set to take off

Krisztian Bocsi/Bloomberg

Many consumers have become accustomed to tapping their phones at checkout, but scanning their palm or paying with their face is still more of a novelty in the U.S. 

Yet, with Amazon, PopID and others rolling out in-store biometric payments and other pilots underway in Brazil, Singapore, Japan and South Korea, early adopters could set the stage for what will eventually be a more widespread way to pay, Christopher Miller, lead analyst within emerging payments at Javelin Strategy & Research, told American Banker. 

While still in its infancy, Goode Intelligence predicts that nearly 3.5 billion people will use biometric payments by 2030. Here's what banks need to know about this nascent, but emerging trend:

Consumers are interested in biometric payments

Notably, 68% of consumers polled said they had used biometrics for any reason, according to the Javelin 2024 North American Payment Insights Emerging Payments survey. Nearly half, 47%, said they are likely or very likely to use biometric authentication at a store using a terminal provided by a merchant.

What's more, banks are trusted by 41% of consumers to store their biometric data ahead of tech companies like Apple and Google or government agencies, Javelin data show.

The PopID model

PopID, a majority-owned subsidiary of the investment company Cali Group, allows consumers to use biometric checkout at more than 380 locations of quick-serve restaurants and retailers across the country. Last summer, the company announced an expanded relationship with J.P. Morgan Payments to deploy in-store pay-by-face biometrics to pilot merchants across the U.S.

One of those merchants is the restaurant chain Whataburger, which said in a press release that it was experiencing faster checkout times and increased loyalty engagement at the counter and on self-ordering kiosks. Customers have to register for biometric loyalty and payment in the Whataburger mobile app, and then they can use their face to pay through a biometric scan. Having customers proactively register mitigates concerns about companies collecting biometric data without permission. Some large companies have been sued for allegedly collecting customers' biometric data without consent.

The Amazon One solution

Amazon One uses palm-vein recognition, which relies on the veins in an individual's palm below the surface of the skin, for payments. By holding one's palm over the Amazon One device, the technology evaluates multiple aspects of it to identify the individual. Cameras in the hardware capture surface-area details like lines and ridges, as well as subcutaneous features such as vein patterns, according to a description on Amazon's website. 

The technology is available at the point of sale at more than 500 Whole Foods Market locations, and select other locations across the U.S., including Amazon Go, Amazon Fresh, stadiums, airports, fitness centers and convenience stores. 

Examples outside the U.S.

Several pilots are underway outside the U.S., with examples in South America and across Asia and Europe. 

In 2022, Mastercard announced a Biometric Checkout Program in Brazil with Payface and St. Marche. The pilot began with five St. Marche supermarkets in São Paulo, allowing customers to enroll their face and payment information through the Payface app. Once registered, "they can simply smile to pay at the checkout without a card or mobile device," Mastercard said in a press release. In late 2023, Mastercard said it was partnering with NEC Corp. to bring the Biometric Checkout Program to the Asia Pacific region.

Read more about biometrics. Biometrics | American Banker

In November, Tencent announced a partnership with Visa to introduce its palm recognition technology for digital payments in international markets, with the service rolled out first in Singapore with cardholders from select participating banks.

In May, NEC said it would introduce a face recognition payment system at Expo 2025, held in Japan, which is ongoing until mid-October. Major convenience store chains in Seoul have also reportedly recently introduced a face authentication payment option.

Challenges persist

In the U.S., adoption of face or palm biometrics has been a work in progress for several years, but Miller predicts these types of payments will become more popular over time for multiple reasons, including ease of use. 

Still, there are challenges. The fraud rate is low for many existing payment methods, including tap-to-pay POS transactions, and it's pretty fast, so it might be hard to convince people—at least initially—that paying by face or with their palm is so much better, Miller told American Banker. "The immediate trigger that would drive substantial uptake right away, just isn't there," he added.

Still, some consumers might find paying with their palm or face more compelling if there are ancillary benefits. This could include entrance to a sports arena, payment for beverages, access to a club area, and more, all with your face. There are systems in development that can continuously recognize you, so re-authorization wouldn't be necessary, Miller said.