Mastercard and Samsung are joining forces to introduce a biometric payment card in South Korea that lets users authenticate transactions with their fingerprint.
The card is set to launch later this year and is being marketed as a corporate credit card in partnership with Samsung Card, though there could be a wider rollout later on.
The card’s chip integrates Samsung’s technology and will be able to be used anywhere that accepts Mastercard chip cards globally.
Biometric payment cards are set to continue gaining momentum thanks to the growing demand for cashless transactions and innovations that are helping drive down issuer costs.
The pandemic-driven rise of contactless payments has contributed to increased activity in the biometric card space: Visa is piloting the solution in the US and Europe, and select BNP Paribas cardholders in France will soon be able to upgrade their existing cards for biometric payment cards, as two examples.
With contactless payments set to grow further, the use of biometric cards will likely follow along the same growth trajectory. In fact, UBS analysts project that biometric payment cards could capture a 15% share of the global card market within the next five years. It’s worth noting that historically, high production costs have prevented issuers from introducing biometric payment cards—but that’s changing now thanks to innovations underway to help bring down costs.
Here’s why Mastercard might be diving deeper into the space:
- Biometric payment cards can help mitigate the risks of rising payments fraud. Card fraud has been on the rise throughout the last few years, costing global issuers a projected $28.65 billion in 2019, according to The Nilson Report. And the coronavirus pandemic has only worsened the dilemma. Biometric payment cards can help mitigate fraud risks because their fingerprint reader adds an extra layer of protection. Mastercard’s move into the biometric card space could help make the card network a more attractive partner to issuers, which may enable it to grow its reach and volume.
- And the cards may help prevent friction as Strong Customer Authentication (SCA) rules come into play. For context, SCA mandates have been gradually rolling out throughout Europe and require multifactor authentication for contactless purchases. Though SCA aims to tighten payment security, it may also increase friction at checkout since customers will need to take added steps to prove their identity. Biometric payment cards offer a solution to this because customers are able to authorize payments directly on the card with their fingerprint. Although Mastercard’s biometric payment card launch is happening in Asia, it’s possible that the offering could move into Europe, where it could be beneficial in helping minimize checkout friction.