FaceBook, FaceTime ..next stop FacePay?


As fraudsters continue to challenge financial service providers around the world, biometrics is starting to offer an alternative – but when will it become truly viable, and part of mainstream payments systems? We look at some developments in biometrics, as the world’s largest biometric system Aadhaar faces its latest setback.


imageLast year this time Uniqul Oy from Finland claimed to become the world’s first provider of face recognition payments systems. They believed they could reduce time spent on transactions from an average from an average of around 30 seconds to less than 5 seconds: cameras monitor shoppers from the time they get into the queue, so as to easily charge their account after scanning their shopping.

Unfortunately it expects shoppers to pay. Customers wanting to use the system needed to pay a subscription depending on proximity to the store.  Scandinavia has many “firsts” in payments, and I’m sure the business model will evolve over time. A big step forward in terms of technology, but I expect adoption will prove to be the next hurdle to cross.

A Deloitte survey found that 72% or respondents would welcome the use of biometric identification. Consumers are concerned about mobile device security, yet 63% of smartphone users have interacted with their bank via a mobile app.

Arguably, it is not shops in developed countries with high card usage where the new systems will first take off. As shopping malls take off in India and China, will people move from cash straight to biometrics, and skip the card payment phase?

Last month when I was in India I had the pleasure of revisiting Shoppers Stop in Andheri, Mumbai, and was witness to an interesting exchange. My friend simply gave her mobile number in order for the loyalty points to be added on – she no longer bothers about carrying her store loyalty card!

This seemed to be a straight-forward solution to the problem of managing multiple loyalty cards, but right now it may only be practical in up-market stores where they have the time to indulge an individual customer, without delaying a whole queue. The potential of delivering benefits to the whole shopping experience from face recognition seems to be something that could further drive a new “Face Pay” experience.

But as fewer people visit stores and more take to shopping online and on smartphones, payment by fingerprint has recently grabbed the headlines – first with the release of PayPal’s Samsung S5 fingerprint payment, and shortly after with news that it may already have been hacked.

From the customer perspective, it is always a quandary to allow new data points about themselves to get captured and possibly become the target for thieves. Personal data is powering a great number of new business models. We are currently investigating how regulations are likely to be built so as to be effective in protecting both our privacy and security.  We’ll take a closer look at this, as well as the potential for biometrics in digital channels in subsequent blogs.

Meanwhile it seems from this report that all is not well with the world’s largest biometric project. It continues to face recognition problems, and in particular the big question of who will pay for the equipment required. Read more  at RBI defers Aadhaar-based payment system?

How is biometrics changing the way people pay at a store near you?