While mobile payment systems like Apple Pay and Samsung Pay are growing, they haven't lived up to the hype that surrounded their arrival in 2014.
But newer biometrics security technologies beyond the use of fingerprint scans could boost adoption rates when purchases are made in-store with smartphones. Those technologies include palm vein sensors or even sensors that assess a person's typing patterns or movements.
For online purchases, iris scans could help authenticate buyers. And while SMS (Short Messaging Service) is an option, banks want greater security when using SMS payments. That's where a multimodal approach -- integrating facial, voice and behavorial scans into what's required for a purchase -- might help.
Smartphone vendors and developers of payment software need to consider the multimodal approach and a variety of new biometric techniques to be successful in coming years, according to Tiffany Huang, an analyst at Lux Research. She recently authored a 50-page report, Securing Mobile Payments with Biometric Authentication (membership required).
"Biometrics are needed to improve mobile payment usage," Huang said in an interview today. "It's hard to see one biometric usage winning in the medium-to-far-term."
One reason for the slow adoption of mobile payments in the U.S. is that consumers don't see the value of using a mobile device instead of a credit card, she added. The roll-out of chip-enabled credit cards in the U.S. could eventually help boost interest in mobile payments, but hasn't apparently made a big difference so far.
A U.S. Federal Reserve survey of 2,137 people published last year showed that 75% didn't use mobile payments because they felt it easier to pay with cash or a credit or debit card, while 59% were worried about the security and privacy of mobile payments.
Huang researched dozens of companies in the mobile payment ecosystem, including banks and credit companies and hardware and software designers ande evaluated new biometrics technologies for ease of use, level of security and cost. Fingerprint scans were evaluated along with scans of palm veins, eyeprints, irises, ECGs (Electrocardiograms), voices and faces.
Different biometric approaches are needed depending on the type of mobile payment. In-store, most customers wouldn't want to pose for a few seconds in front of other customers in line for a facial or voice scan. Meanwhile, Huang found that palm vein sensors would be an optimal point-of-sale authentication technology, but would be prohibitively expensive.
Palm vein sensors are rare because they require a large piece of hardware to read the palm vein patterns in a hand, Huang said. Palm veins are 100 times more unique than fingerprints and can't be easily spoofed because the veins are below the surface of the skin.
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