By Vince Graziani, CEO of IDEX Biometrics ASA
The frequency of debit and credit card scams has risen to unprecedented levels because the start of the pandemic. Even as many national economies falter from coronavirus, and millions of citizens struggle with job losses and debt, fraudsters haven't stopped. Quite the opposite, in fact. It seems many have taken advantage of the disruption caused throughout the crisis to aggressively pursue fraudulent transactions.
According to data from Experian and the National Hunter Fraud Prevention Service, fraud rates across all UK financial products rose by 33% year-on-year in April 2021. Fake car and other asset finance applications saw probably the most extreme rise of 181%, while fraudulent payments through current accounts rose by 35%.
Meanwhile, US banking tech firm Fidelity National Information Services found the dollar volume of fraudulent credit and debit card charges has additionally soared 35% year-on-year during the same period.
Fraud is also on the rise generally. In the US, fraud losses reached $16.9 billion in 2021, a 15% increase on 2021's figures. Going through the uncertainty of COVID-19 at the same time as a result a negative trajectory means that cardholders, banks and companies are all under intense pressure to find a sustainable and robust solution to payment fraud.
Evolving beyond passwords and PINS
Fortunately for consumers, many of the year's fraudulent transactions were caught by global banks and financial services before they hit cardholders directly. However, it doesn't deter from the fact that a continuing spike in fraudulent activity still presents a large challenge for both consumers and banks.
What banks and card issuers need to do is instil a sense of trust – that confidence among their customers that they're being protected in a proactive, rather than reactive, way. Sticking with the status quo can have an adverse effect even if you are in a position to catch the majority of fraudulent attempts. There needs to be a visible evolution from passwords and PINs, which have now become so symbolic of card and payment insecurity.
Therefore, it is vital that banks and payment providers take action now to support their customers and develop a secure and convenient solution that moves payment security forward from all of these traditional methods.
Strengthening relationships and reputations
The good news is, there is already a more secure way to authorise transactions and safeguard our finances, by means of fingerprint biometric payment cards.
Biometric fingerprint payment cards deliver end-to-end encryption, which secures anyone's card and data. Authorising payment cards having a fingerprint will also ensure that the card is secure as it can only be used by the dog owner, reducing the potential for fraud to happen.
At any time, this is a reassuring notion to the public, but right now, when consumers curently have enough to fret about, it might be a significant market differentiator. Card issuers and banks can simultaneously instil levels of confidence and relief in their valued customers, while offsetting the effects of a struggling economy. It is therefore a product that strengthens relationships and reputations at the same time.
However, time is of the essence, and tangible action is required now. By adopting fingerprint biometric payment cards, banks and card providers can quickly attack the issue on four fronts: crime prevention, privacy, cost saving and convenience. Ultimately this process of authentication will counterbalance the criminal challenge at hand, whilst protecting end users.
Using fingerprint biometrics to proactively counter fraud
The challenge of fraud is met by linking the owner – physically – to their card via fingerprint authentication. End-to-end encryption further secures that card and person's data to make an unequivocal connection between person and object. When combined these two aspects ensure that criminal misuse or fraud isn't an option, providing banks with a proactive cost saving element.
Importantly, biometric fingerprint cards offer consumers with very high levels of privacy, as their fingerprint information is held securely on the biometric card, not in a shared database. The card owner's fingerprint image is immediately transformed into an abstract biometric template, that is then matched and stored in the card's secure element (SE). Therefore, the full fingerprint image isn't stored and also the data never leaves the card.
For consumers, the financial advantages of not being defrauded are obvious, however for providers too, fingerprint biometric cards could be kept for longer than traditional cards to offer a layer of enhanced ROI. Importantly, fingerprint biometric cards boast convenience with the sheer speed and availability of transactions that these cards provide. When paying for goods, consumers want a transaction process that is fast, frequent and free of hold ups.
Biometric payment cards offer that security and speed, as they are no more complicated to use than tapping a contactless payment – which shoppers are long accustomed to. In fact, touch-free payments have recently become routine for consumers to tap their card to cover goods and services instead of using cash or punching inside a PIN to minimise multiplication of coronavirus.
Even more than that, increased authorisation with your fingerprint will secure the payment card, taking out the need for PINS and lowering the need for the contactless payment limit, all making the transaction process faster.
An extraordinary time calls for extraordinary innovation
On their own, in ordinary times, fingerprint biometric payment cards could be seen as an innovative step forward in the financial landscape to make consumers' lives easier. But we aren't in ordinary times. Consumer pressure points, fraud rates, and also the implications of financial breaches certainly aren't ordinary. Therefore, the reaction must not be ordinary either.
It 's time to fight back with an innovative and extraordinary means to fix protect consumers from fraud. Biometric fingerprint payment cards would be the way to do that.