Guest blog: How the selfie is revolutionising mobile payments
10 March 2016 15:04 GMT

By Steve Cook, Director of Sales EMEA for Daon

The selfie is still a relatively new word yet everyone knows what it means and furthermore it has transcended into almost every language in the world without translation.  Australia has proudly laid claim to inventing the term selfie, and the word itself was named “2013 word of the year” by the Oxford English Dictionary – after its first known use was revealed to be by an Australian describing a photograph taken while drunk at a 21st birthday party.

According to a recent IDC report, the number of worldwide smartphone shipments was expected to grow 9.8% by the end of 2015 to a total of 1.43 billion units. By 2019 they predict it will reach 1.86 billion units. Not to mention tablets, ultramobiles and PCs bringing that total to a staggering 2.5 billion units. Nowadays, every device contains a camera, normally both front and back, so it stands to reason, selfie has become a byword for every self-portrait from these devices!

So how is it playing a central role in mobile banking and payments?  There has been much in the news lately regarding MasterCard’s rollout of biometrics to streamline and improve customer convenience for online payments. This has great potential to change how people interact digitally with financial institutions and provides a superb opportunity to remove reliance on troublesome passwords. They are starting with Finger and Face biometrics but clearly also talking about harnessing future biometric innovations.

This has been dubbed “Selfie Pay” in the media though clearly it’s much more than that.  “Selfie Pay” is an app-based authentication solution that leverages a mobile device to secure online payments and mobile banking applications using fingerprint and facial recognition.

The MasterCard Identity Check™ technology is being rolled out to 14 countries this summer, including the U.S., Canada and the U.K. The Selfie Pay service is expected to be more secure than the weak passwords and PIN numbers.

It employs a layered approach to security, including device cryptography, geolocation, and biometric verification, enabling consumers to have a safe and easy way to complete payments online.  Banks will benefit by having increased approval rates, providing more choice to consumers, improved cardholder loyalty and a strong fraud protection tool. The technology will help merchants reduce cart abandonment thus helping to drive revenue.

One of the biggest customer pain points regarding internet shopping and card not present transactions has been consumer friction related to 3D secure.  Some payment experts have been less than complimentary about its usage ever since its introduction and biometrics are an ideal enabler for authenticating online transactions when compared to more passwords and knowledge based authentication.

MasterCard have said that they want to be able to trust people online, and the current technology that people are using to do that was not working.  Every human being is frustrated with passwords – they forget their passwords, there’s just way too many of them; there’s too many rules – so they had to come up with some way for people to easily identify themselves in a way that the issuer could verify.

The main objective for the selfie in payments is to authenticate who you are and make the user experience in the customer journey as frictionless as possible.

Biometrics enables a much smoother process and reduces the current high abandonment rates related to the additional authentication steps involved in 3D secure. No longer do we need to remember so many passwords and PIN numbers.  It’s all about convenience yet having a secure process.

In essence, it is its simplicity. One of the main security features to prevent spoofing is its liveness functionality.  As soon as your camera opens and the screen appears, you position your face within a designated area and you will be asked to “Blink” to prove that you are real.  During this process your device is also being authenticated before you are validated.  As well, there are other security checks happening in the background to ensure a photo or video is not being used but the whole procedure takes less than 2-3 seconds to log-in, verify who you are or validate a transaction. The technology behind this is being provided by Daon.

To see how it works for MasterCard, have a look at the video clip they recently released on YouTube.

As passwords have become a bugbear for many consumers, another area where biometric authentication could play a significant role is offering an alternative to password re-sets. 

A great many people cannot be bothered with trying to remember which password works with which account.  So often they frequently just click the reset button or have to engage with a call-centre and trudge through a series of security questions. This is both time consuming for customers as well as having a costly impact on call-centres.  As much as 30-40% of calls to call centres are for password re-sets.  What is there not to like if you can just validate yourself and who you are with a selfie!  Having this feature automated could save large corporations millions.

MasterCard are not the only financial company planning to launch biometric authentication this year.  A number of new challenger banks such as ATOM will launch their version. 

Not to be left out – many global banks are also looking at having some form of biometric functionality for identification purposes.  By the end of 2016, we will likely have several mobile banking and payment applications all using biometrics if not selfies!

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