There have been a couple of interesting announcements in the last week involving payments, one of which has some really interesting significance, and one which just served as a reminder that innovation in the space is hardly over, but we’re still a long way from an easy, simple, multi-factor authentication method for payments that will work both online and in stores.
Simple, easy, online and in-store should be the standard for any new payment solution, and so far everything that we’ve seen is a half-measure at best. Sure, I like
And don’t get me started on chip and signature. Yes, it makes it harder to steal my card but does nothing to address online fraud, and frankly from the rare occasions when a store associate compares my signature to the one of the back of the card, I highly doubt chip & signature will stop someone from physically stealing and using my card.
So what’s left? That’s where the announcements of the last week come into play. First, a press release from SmartMetric, a biometric firm that has announced a credit card with a fingerprint scanner embedded in the card. This is significant because the card is still thin enough that it can be used in existing credit card and ATM machines – no new hardware required. The fingerprint scanner unlocks the card so that it can be used, and it works as a chip card as well (I have no comment on the production values of this video).
The other announcement came from one of my fan-fave companies, Fitbit (only 50,000 more steps to hit 13 million in my lifetime of Fitbit use!). I almost missed this one, which I can’t believe: Fitbit has acquired the wearable payments intellectual property assets of Coin, the beleaguered card manufacturer who promised to revolutionize payments (don’t they all), and then got sued by customers for failing to deliver. Coin promised one card to rule them all – a card that you could use to load all of your credit cards on, and then select which one you wanted to use to pay at any given merchant.
As Fitbit’s products look more and more like smart watches, it’s no shocker why they’d want a payment technology as well, and it will be interesting to see if Fitbit can adapt Coin’s much less talked about wearables technology. Seeing as how Coin has stopped selling its Coin 2.0 cards (or anything else for that matter), I have to suspect that the wearable IP is the only interesting thing the company had left to sell.
So what other payment innovations are out there, and do they offer any possible alternative to chip and signature?
Well, SmartMetric and Coin aren’t the only companies experimenting with messing with the card itself. As electronics get smaller and batteries get better, it’s increasingly possible to make cards much smarter than they are today. Coin was a start down that road. SmartMetric promises fingerprint technology, and
With the Dynamics/MasterCard card, consumers enter their PIN directly on the card (it’s B-roll video, so a little weird but worth it), not to validate a transaction, but much like the fingerprint to unlock the card, with the added step of generating a one-time use PIN that you would actually enter at point of sale to authorize the payment. The value here is that you could potentially use it for online purchases, provided the merchant has the ability to take that generated PIN and pass it along to the payment processor. It would at least help validate that the person making the online purchase actually has the card physically in hand.
But of course, all this does is increase consumers’ dependencies on their cards, rather than getting them out of the wallet or out of the purchase transaction altogether. And that’s where biometrics comes in. The problem with biometrics (using some part of your body to prove that you’re you) is that it can often require special hardware. Apple Pay is a case in point – no problem when using the phone, big problem on my MacBook, which does not come with a fingerprint scanner.
Two trends threaten to disrupt this market, though. The first is the increasing ubiquity of fingerprint scanners. Research firm Tractica estimates that there are around 100 million devices (smartphones and tablets) deployed in the market today with fingerprint scanners on them, and believes that number will surpass 1 billion by 2021. It’s a technology that people increasingly know how to use, thanks to that growing inclusion on mobile phones. And it’s ironic, because there has been plenty of money burned in the name of deploying fingerprint-based payment solutions. But it’s still not perfect, as any laptop shopping trip will quickly demonstrate.
Other vendors are still trying to break through this hardware conundrum in the marketplace. Biyo is a provider of palm-based scanning solutions. Fingerprints can have a negative connotation for some people, and there are plenty of videos out there of fingerprint hacking. But palms are bigger, and much more difficult to fake because the technology uses identification of the unique web of veins in your palm, rather than the unique set of swirls on your skin. Downside is, it requires a special palm reader, one that does not ship natively on any consumer computing device today. Merchants would have to deploy new hardware, and consumers would have to either also acquire that hardware themselves, or would have to visit merchants to set up their palm as security. Not exactly convenient.
Which gets us to options where the hardware is already ubiquitous, for example, cameras. My MacBook definitely comes with a camera, as does pretty much every other screen I own short of my TV – and I can hook a webcam up to that pretty easily if I wanted to. Cameras can enable two kinds of biometrics, provided they and the software they run are good enough: facial recognition, and iris scanning.
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Both of these solutions would use existing camera technologies. So potentially little to no investment for merchants to deploy these kinds of solutions in stores, and a high likelihood that the technologies could be taken to online shopping too – because of the camera in nearly every device, or the relative ease with which a webcam could be added for a relatively low price.
And yet, despite all of these innovations, I still don’t feel anything grabbing me as a consumer. Payment authentication is getting more sophisticated, and given the need to protect against fraud, especially as US fraud shifts online thanks to EMV, there are going to be a lot more types of authentication thrown out there to see what sticks with consumers – something easy, simple, fast, secure, and good for both online and stores.
As for me, I’m still waiting for that day.
