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The Future of Biometric Authentication for Small Business Payments

Hands holding a phone and a credit card

The move to a cashless world has been game-changing for small businesses for convenience and flexibility. But there’s still one giant issue both consumers and vendors face when making or offering newer payment options: security. While transaction numbers are rising, according to the Pew Research Center, at least 38% of consumers say that mobile payments are “poorly protected.” One of the biggest reasons Americans have been slow to adopt contactless payment systems compared to the rest of the world is a lack of trust.

It’s a valid concern. Cyberattack is one of the biggest threats to small businesses. So how can businesses give their customers the option to pay without cash and to do so confidently? Two words: biometric security.

What is biometric security?

Biometric security, or biometric authentication, is a security system that uses biological characteristics or behavioral identifiers in order to recognize a user. Instead of, or in addition to, using methods like passwords to get into your device or app, you become the “password” or “key” that unlocks your access to a system. Check out some of the ways the technology works:

  • Fingerprint. This is the biometric screening you may be most familiar with, or even use on a daily basis with your mobile device. You may even see it in offices or apartment buildings, as it’s an identifier that can authenticate with more accuracy than, say, a key card.
  • Facial. Facial recognition is largely becoming one of the more popular physical identifiers, largely thanks to smartphones that use your face to confirm your identity.
  • Voice. With widespread use in services like Siri and Alexa, more companies are finding innovative ways to use speaker identification and voice biometrics as a security identifier. For example, the USAA Bank uses both voice and facial recognition on its app to provide multi-factor biometric security.
  • Behavioral. It may become more common to use behavioral characteristics like the rhythm of your typing on a keyboard, the tilt at which you typically hold a phone or the gait of your walk to biometrically recognize you—but these identifiers are pretty futuristic and not at all widely used now.

Passports are great mainstream examples of biometric security. Many contain chips with identifiers from fingerprint or iris scans, plus protection against unauthorized data readers accessing those digital photos.

All of the personal information, from passport data to the facial recognition scan a phone might use, has the potential to become part of an individual’s Personal Identifiable Information, or PII. Each PII already includes info like social security and driver’s license numbers, and now, in our increasingly digital world, it will all become part of digital identification that can help us move securely through new ways of doing business.

Why is biometric authentication secure?

Biometric authentication can provide excellent security for a few different reasons. It’s far more difficult for hackers to replicate fingerprints than it is for them to make use of stolen passwords. It’s also almost completely invulnerable cyber attacks from “shoulder surfing” (when someone looks over a customer’s shoulder to see them enter their PIN) or the use of a device that steals the info from a credit card when it’s being swiped.

Much of the technology that enables biometric security also enables contactless payment interactions, which a whopping 74% of consumers want to keep using even in a post-pandemic world. By giving users more payment options that include biometric security, you’re giving them the confidence they need to buy.

Should I be concerned about security?

Of course, like all forms of security, biometric authentication isn’t perfect. One big concern is what does happen if fingerprint or facial recognition data is breached. A password can change, after all, but fingerprints are forever. Plus, if a business is not running an advanced system, there’s a greater chance for false authentications that lead to critical mistakes.

The important thing for small business owners to understand is that although it’s not the only form of protection you and your customers need, it is one that an increasing number of consumers trust. Many U.S. consumers have expressed doubts in the past about storing credit card info in their mobile devices or accessing banking information on their phone.

How do I give my customers those options now?

Here are a couple ways you can bring biometric authentication payment options to your customers:

Point of sale (POS) systems. This is the biggest area where you’ll be able to offer biometric authentication. By integrating it into your existing POS system, you can let users pay using their smartphone, which they trust to store their information as it’s already protected by biometrics. Apple Pay is the most common example of a contactless POS system in the U.S. right now. These allow for contactless mobile wallet payments, but you can check in with your current POS system to see if it’s an option they offer.

E-commerce biometric options. If you have an e-commerce store, consider upgrading your online payment system to include software that lets consumers automatically buy your products with the payment information stored in their phone. Rather than having to go to a separate page to enter their data, they can simply click “buy,” and then your system will confirm their identify by asking them to scan their face or fingerprint again. If you have a system that runs with PayPal, Apple or Samsung’s mobile payment systems, you can likely already enable this ability. In addition to helping customers feel more secure, you can capitalize on the 40% of online buys that, according to invesp, are impulsive. At least one-third of consumers have turned away from an item rather than enter their credit card information. Enable biometric recognition today and you may seriously boost your conversion rates.

One last tip

Don’t invest in these systems only to have them fail you when your internet service can’t keep up. Small businesses need speedy connections for a variety of different reasons, and not frustrating your customers during the payment process is one of the big ones. When you’re upgrading your systems to include biometric authentication for payments, make sure that your internet service will work as hard as you do to meet your customer’s needs.

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