The biometric authentication brings a big advantage to the contactless payment scheme due to the added convenience of not having to punch in the PIN code for every transaction. This is obviously a very important aspect that has come into the spotlight during the pandemic when all extra contacts should be avoided.

Cash is fading away in Nordic countries

Cashless payment technologies have come a long way from magnetic stripe cards to contactless cards using biometric authentication methods. This development will continue when societies are striving for financial efficiency and ease of use.

Nordic countries are forerunners in adopting modern payment methods both in eCommerce and in physical locations. For example, in 2019 only around 6% of Finns used cash as their primary payment method, and Sweden aims to become the first cashless society by 2023. While the survey covered plenty of different nationalities, the respondents are all living in Finland and therefore the results are to be interpreted in this context.

Facial recognition is gaining popularity

One of the most important results of the survey was the high acceptance rate of facial recognition as a biometric authentication method. The fingerprint recognition was the most preferred method in general, but when the authentication is conducted with the merchant’s device, as opposed to the consumer’s own device, the facial recognition was equally acceptable over the whole target group. Males even preferred it more than fingerprint method while females preferred the fingerprint method slightly more than the facial recognition. With consumer’s own device the widely used fingerprint recognition was still number one. Less familiar iris scanning and finger vein recognition methods were also more acceptable with the merchant’s device.

Obviously, the use of biometric methods does not come without challenges. Survey respondents stated that they are concerned about the security and privacy especially when using merchant’s device. Professionals interviewed beside the survey have noticed, that for consumers it is essential that their personal data is safe.

Strong drivers for development

Even though the survey target group can be considered as advanced consumers the age range covered was from early 20s to late 50s and it contained early adopters as well sceptics. The results show their higher than expected preparedness to adopt new biometric methods in contactless payments. It is easy to forecast, that the development of easy to use and secure biometric authentication methods will continue in line with the technological advancement. Good examples of emerging methods are those based on the users’ behavior, like the way they are holding their mobiles. The benefiters of the development are not only the consumers and merchants but also the fintech companies in the form of increased business opportunities. Finland is in a good position to compete in this field due to the advanced use of mobile technologies.

Read the whole Master Thesis report at Theseus.

Authors:
Marko Hartoneva, Product Owner at Nets Group, MBA
Jouni Soitinaho, Principal Lecturer at Haaga-Helia UAS