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Guide to Biometric Payments

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The GoCardless content team comprises a group of subject-matter experts in multiple fields from across GoCardless. The authors and reviewers work in the sales, marketing, legal, and finance departments. All have in-depth knowledge and experience in various aspects of payment scheme technology and the operating rules applicable to each. The team holds expertise in the well-established payment schemes such as UK Direct Debit, the European SEPA scheme, and the US ACH scheme, as well as in schemes operating in Scandinavia, Australia, and New Zealand. See full bio

Last editedFeb 20233 min read

Once used primarily by law enforcement and security agencies, biometrics has now become a mainstream way for consumers to verify ID and make payments. From smartphone fingerprint scanners to facial recognition, many of us already use biometrics to unlock our devices and access apps. But what is biometric payment, and how is it used? In this guide, we’ll cover how biometric payments work as well as their pros and cons for businesses.

What is biometric payment?

Biometric payment refers to the use of a customer’s physical characteristics to authorise payment or complete a point-of-sale transaction. Fingerprint scanning is the most common biometric payment method. However, there are many types of biometric data that can be used to verify an individual’s identity as part of payment authentication. This includes:

Iris or retina recognition
Face recognition
Voice recognition
Vein patterns
Signature recognition

In the UK alone, over a third of smartphone holders using their fingerprint scanner was already using it to authorise payments by the end of 2017. A Unisys survey from this same year discovered that 63% of European consumers viewed biometric payment as more secure than using passwords and PINs. This is because a person’s behaviour patterns and physical traits are unique.

How does biometric mobile payment work?

There are multiple ways that biometric payment is used, but many involve a mobile device or smartphone. Here are three types of biometric mobile payment.

Voice recognition: The buyer completes a transaction using a spoken command on their mobile device. Built-in virtual assistants like Apple’s Siri use voice recognition technology to verify the user’s identity and complete the transaction request.
Facial recognition: Rather than speaking a command, the buyer initiates the request or completes a transaction using facial recognition technology. This type of authentication simply requires holding your smartphone up to our face, which is far more convenient than remembering a unique PIN or password. A Juniper Research study estimates that 1.3 billion devices will come equipped with facial recognition tech by 2024.
Biometric fingerprint payment system: This is currently the most popular type of biometric payment. Customers can access payment tools like Apple Pay or a digital wallet on their smartphone, verifying the transaction with a tap of their fingerprint using the device’s built-in scanner. Fingerprint scanning can also be used for point-of-sale purchases. Some businesses offer a biometric payment card program that links to a customer’s bank account. The shopper can verify identity at in-person kiosks with a tap.

Biometric mobile payment advantages

There are clear advantages to accepting biometric payment.

Convenience – Make it easier for customers to check out using fingerprint or facial scanning. Consumers prefer a fast, easy payment option.
Security – Biometrics are unique to each individual, enabling more secure transactions. If a smartphone is stolen, the thief will be unable to use its stored financial details without biometric authentication.
Cost – Compared to credit and debit card transaction fees, biometric payments are low in cost. Businesses can reduce chargeback fees due to less reliance on these other payment methods.

Biometric payment system disadvantages

While there are many pros to using this technology, there are also a few disadvantages associated with biometric payments. The technology is only as secure as the databases it uses, which can be prone to hacking attacks without regular checks and upgrades. As with any form of payment, it’s vital to stay on top of the latest fraud prevention efforts to ensure the safety of your customers.

The future of biometric payment

Future trends to watch include the rise of biometric payment cards. For example, NatWest has issued a biometric credit card with an embedded fingerprint sensor to automatically verify identity. Another trend is the use of behavioural biometrics, identifying users by their movements and keystroke patterns.

Open banking is another area merging with biometrics to provide additional layers of security. Consumers can use personal fingerprints and facial scans to instantly verify and approve open banking transactions. GoCardless is also harnessing this technology in its Verified Mandates and Instant Bank Pay services, streamlining the payments process.

Ultimately, there are advantages to merchants and consumers alike. Convenience and safety are at the forefront of online and mobile purchases, so you can improve your conversion rates by embracing a variety of payment methods equipped with an extra layer of biometric security.

We can help

GoCardless is a global payments solution that helps you automate payment collection, cutting down on the amount of financial admin your team needs to deal with. Find out how GoCardless can help you with one-off or recurring payments.