December 07, 2022
Emerging technologies provide businesses with new channels to accommodate growing consumer demands. For example, technological innovations allowed companies to automate commercial and banking operations and improve the supply chain. The rise of cryptocurrency as an alternative to traditional payment methods enables faster and more convenient transactions. With it, users can access various bank services without intermediaries in the currently mostly deregulated crypto sector.
Unfortunately, fraudulent activities are increasing as financial institutions adopt digital systems. Fraudsters have become tech-savvy in the past years and learned to circumnavigate passwords and personal identification numbers (PINs). This challenges companies to implement strong customer authentication solutions, like LoginID, and secure and improve the experience of their services.
Understanding Biometric Payment Authentication
The Valuates Reports projected that the global biometric technology market will grow by 11% from 2022 to 2028, amounting to more than $39 billion. The main reason behind this growth is the need for highly secure authentication and digital identity solutions across industries. Biometric payment authentication can help businesses implement robust security measures and provide a frictionless customer experience.
Hackers primarily target passwords as they can guess many of them easily or gain them via phishing attacks. Proofpoint found that more than 80% of surveyed 3,500 working adults experienced at least one successful phishing attack in 2021. The survey also revealed that phishing attacks increased by 12% in the same year.
Instead of requiring clients to memorize complex passphrases, merchants can use biometrics to verify if the person making the purchase and payment is the actual account owner. Using FIDO2 biometric authentication, users can identify themselves through their physical attributes (e.g., iris, fingerprint, or facial scan) plus the ownership of their device itself.
Aside from securing user confidentiality, biometric authentication methods also make payment confirmation more cost-effective. Biometric digital signature authentication and payment authentication can help mitigate the risk of fraudulent transactions and friendly fraud benefitting e-commerce industries, banks, and the crypto sector.
Biometric Payment Authentication for E-Commerce
In 2019, the rise of 4G and 5G connectivity allowed large companies, even small and medium enterprises (SMEs), to cater to their customers' digital demands. As a result the e-commerce market's value is projected to grow to more than $9 trillion from 2020 to 2027. Purchasing products and services has become easier as transactions can be done electronically, and payments can be made remotely through digital wallets.
Juniper Research expects e-commerce losses worth over $200 billion between 2020 to 2024 as sophisticated fraud attempts emerge. Considering the cybersecurity threat caused by online payment frauds and false chargebacks, companies can integrate FIDO2 passwordless authentication to enhance e-commerce fraud prevention.
With FIDO2, users no longer need to remember passwords. They only have to utilize the biometrics native to their device to access mobile applications or websites that support FIDO WebAuthn. This can give consumers a smooth and safe buying experience using their smartphones or laptops.
Biometric Payment Authentication for FinTech
Financial technology (FinTech) enables banks and finance companies to enable online services through computers and smartphones. The development of specialized software and algorithms has empowered financial institutions to improve customer experience and employee performance. These advancements are important for long-term success across banking institutions.
As FinTech companies store enormous amounts of personal data, securing systems and accounts using password-only authentication can lead to massive data breaches and financial losses. Online identity thieves can effortlessly phish weak passphrase combinations. Banking industries suffer the biggest financial damages in the event of successful cyberattacks, with annual losses amounting to more than $18 million per company. These attacks can significantly erode user trust and damage brand reputation.
A security breach is only the beginning if an account takeover occurs. Once fraudsters succeed with their illicit acts, they can either steal funds from the account or sell the user's data on the dark web. These risks encourage banking institutions to bolster their real-time fraud prevention protocols. Investing in biometric identity verification infrastructures helps banks improve the security and experience of their digital payment facilities.
In addition, banks can institute biometric payment authentication methods like LoginID’s FIDO-certified transaction confirmation. This tool prompts a user to enter their biometric digital signature before any sensitive data or money can be transferred and creates an irrefutable digital receipt for every transaction.
Biometric Payment Authentication for Crypto
Cryptocurrency has propelled into the mainstream in recent years as an alternative to traditional payment schemes and financial services. Crypto also paved the way for anonymous transactions. Unfortunately, cybercriminals see this as an opportunity to conceal illegal acts. Without a third party overseeing crypto transactions, fraudsters can remain undetected. Chainalysis reported that crypto lost an all-time high of $14 billion in 2021 from scams that largely occurred in decentralized finance (DeFi) platforms.
With crypto scams becoming sophisticated, crypto exchanges and digital wallet providers must employ stringent anti-fraud measures to provide more reliable and secure transactions to users. Biometric technology can be the answer, as it is hard to break through without the person's biometric code. The user's biometrics is the only means to log in and confirm payments. Blockchain and crypto companies can utilize LoginID’s biometric authentication and payment authentication solutions to better secure user experiences and enhance transaction security.
LoginID Solutions for Better E-Transaction Experience
With the Internet, consumers can now shop and transact in the comfort of their homes. E-commerce, FinTech, and crypto have become alternatives for traditional shopping and physical transactions, as people find convenience in them. However, as these industries expand to accommodate modern capabilities, online crimes also rise.
The continuous increase in fraudulent web activities should encourage businesses to prioritize digital security. Integrating passwordless authentication solutions like LoginID helps companies verify user identities and provide confidence in every transaction. Instead of passwords, the individual's biometric digital signature serves as their authentication means.
Knowledge-based credentials are no longer reliable when securing user data. Biometric-based security products, like FIDO-certified digital signature APIs, become their ideal replacement. They allow companies to deliver user-friendly payment confirmation, thereby increasing the conversion rate. It also lessens cart abandonment without comprising data protection.
LoginID is easy to integrate across various channels, platforms, and operating systems. Password management will no longer be the norm among information technology (IT) staffers. Instead, the IT department can focus on the tasks that matter.
To learn how LoginID can help, get in touch with our experts today at firstname.lastname@example.org. Or you may also register for a free account to get immediate access to LoginID's authentication solution.
For more information, check out LoginID's passwordless authentication tutorial or check out the developer documentation.