Visa to introduce biometric payments
(7 December 2017 – Australia) Visa customers will be able to take a scan of their fingerprint or face to authorise a credit card transaction, instead of entering a PIN, as part of a crackdown on payment fraud.
The credit card giant is launching the biometric authorisation in a bid to reducing fraud, as the number of stolen credit card details, and rate of online purchasing quickens.
Visa issued new standards that will remove the need to enter a personal identification number (PIN) when making purchases in-person. It is also beefing up its systems for detecting fraudulent transactions made online.
Under the new standards, instead of using a PIN for purchases over $100, customers will be able to use their smartphone to take a scan of their fingerprint.
However, the anti-fraud measure is only available to purchases made via a digital wallet. Additionally, the roll-out will become be dependent on phone manufacturers’ delivering on the technology and meeting the standards.
Visa Asia Pacific head of risk, Joe Cunningham expects "biometric" payments to become common within the next year.
"Five years ago, the idea that entering a PIN could become a rare experience would have been almost unbelievable," he said.
"Yet how we pay is changing fundamentally and security needs to move at the same speed. Biometrics are a crucial part of the future. Some devices that use these new standards have just entered the market and we expect it to become commonplace within the next year.”
Alongside biometric payments, Visa is also upgrading systems used to detect fraudulent online transactions, which account for the vast majority of payments fraud in Australia.
It says the new system will sift through 10 times as much data shared between banks and merchants to spot fraudulent purchases.
For 64.3 percent of Australian businesses, “security of payment” was the biggest concern when accepting payments online, followed by “reliability of payment gateway” and “speed of payment”, according to East & Partners 2017 Australian Merchant Payments Program.
"Where payments volume goes, so too does fraud. This means fraud is shifting to e-commerce, a trend we’re sensitive to," Cunningham said.
Following the changes, online shoppers will need to confirm their identities via two-factor authentication, whether that be a password or fingerprint scan.
A shift to the increased need for payment security has come as “card not present” fraud exceeded A$417 million last year, and accounted for more than three-quarters of total card fraud.
Last month, the central bank said there was a significant rise in online fraud, and that banks and payment service providers should make it a priority.