Turning the tables on the global payments mode, technology is set to turn things upside down in the next five years. According to the latest report, global digital payments are set to swell over $1.2 trillion by 2027 from the present $332 billion in 2022.
The new digital transactions use biometrics, typically facial and fingerprint recognition, to authenticate remote mobile payments. This growth of 365 percent, according to Juniper Research, is driven by recent regulatory changes, with the introduction of SCA (strong customer authentication) pushing greater adoption.
The SCA requirement of PSD2 (second payment services directive) has pushed financial institutions to implement biometric authentication. To meet this requirement, financial institutions have capitalised on smartphone biometric authentication capabilities; accelerating the technology's adoption.
The report highlights that the volume of biometrically authenticated remote mobile payments will grow by 383 per cent over the next 5 years, reaching 39.5 billion globally by 2027. The new research identified OEM (original equipment manufacturer)-pay solutions, including Apple Pay, as a driver of mobile payment biometrics adoption.
“OEM-pay vendors should use their influence over smartphone design to enhance built-in biometric systems within devices and ensure that security is maintained as new threats emerge,” the report said.
Further to maintain trust and reduce fraud, financial institutions are implementing step-up authentication, where certain transactions are escalated for biometric approval based on risk scoring.
The report found that facial recognition is paving the way for greater adoption of biometrics in mobile payments, with OEM-pay solutions leveraging the near ubiquity of facial recognition capabilities to provide frictionless checkout experiences for customers.
“With the use of facial recognition increasing, the technology has become a target for malicious actors using advanced spoofing techniques, such as digital injection attacks,” the report said.
In response, mobile authentication vendors must prioritise the design and implementation of enhanced liveness detection, and anti-spoofing techniques, to combat the ever-evolving role of fraudulent players and ensure that security is not compromised, the report added.