MasterCard is rolling out its new mobile payment verification services, pay-by-selfie and pay-by-fingerprint, this year in Canada, the US, and the UK.
Retailers in the US and the UK are implementing security checks, such as 3D Secure and Verified by Visa, during the online checkout process. But the checks may obstruct the shopping experience, which can translate into lost sales.
In the UK, 18 percent of online shoppers abandoned their baskets due to “excessive payment security checks” in 2012. And in the US, companies lost $118bn in potential sales in 2015 due to “false positives”, transactions that are wrongly declined because financial institutions incorrectly associate them with fraud.
The pay-by-selfie and pay-by-fingerprint concepts propose a simpler alternative to these security steps at checkout. Called biometric authentication, a banking customer’s photo or fingerprint could replace these cumbersome checks.
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The Apple Pay platform on iOS already gives iPhone and iPad owners the option to authenticate payments with a fingerprint at select online retailers and stores.
On Android devices that have built-in fingerprint sensors, such as Samsung’s smartphones and tablets, users can use Android Pay or Samsung Pay to make payments with fingerprint authentication. All these platforms already work with MasterCard credit cards.
MasterCard’s new platform, called the Indentity Check app, gives its cardholders the option to pay with a selfie, as an alternative to the fingerprint. MasterCard holders at participating financial institutions can install MasterCard’s the Identity Check app on their mobile devices, but it will only work for online purchases, not at physical retailers.
Late last year, MasterCard ran concurrent pilots in the Netherlands and the US. Over three months, 750 ABN Amro Bank customers in the Netherlands and 240 employees of California-based First Tech Federal Credit Union participated over two months. Participants could choose between using selfie or fingerprint authentication.
Combined data from both pilots show that 92% of all participants thought Identity Check was more convenient than typing in passwords, and 83% believed it was more secure.
Overall, 93% said fingerprint authentication was convenient, and 71% rated facial recognition as convenient.
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