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Samsung S8 will use facial recognition for payments

Samsung’s soon-to-be-unveiled flagship phone, the Galaxy S8, will allow its owners to use facial recognition or iris scanning to verify payments made using Samsung Pay, reports by Bloomberg.

This is the first time a major mobile wallet supporting facial recognition — others such as Android Pay or Apple Pay require users to scan their fingerprint or enter a PIN in order to complete payments.

The move has key implications for Samsung and for the mobile wallet space in total.

  • It’s a giant leap forward for image-based bio-metrics. By now, the success of fingerprint scanning is all but assured – BI Intelligence estimated 62% of smart-phones were bio-metrics-enabled as 2016 drew to a close, a figure which will rise to 100% by 2020. But facial and retina scanning bio-metric technologies like Samsung’s are still nascent for any use case, let alone those with the highest sensitivity, like payments. A major phone provider like Samsung giving bio-metrics its seal of approval is likely to prompt followers.
  • It shows Samsung believes mobile wallets are, or will become, very important to consumers. The phone maker has its feet to the fire to move units, after losing $6 billion on its incendiary Note 7. With sky-high stakes, Samsung is investing in upgrading its mobile wallet as one of its key differentiation against rival phones. In other words, Samsung is putting chips on the table that its users either care deeply about mobile wallets now, or they will soon.

Most importantly, Samsung Pay’s facial scanning upgrade makes payments easier. Far from the slow and cumbersome early implementations of facial scanning, today’s advancements mean users can be authenticated in a blink of an eye. In a payments setting, this is a small but noticeable time and effort improvement over scanning fingerprints — and every little bit matters when attempting on swiping a card, a process that took minuscule effort to begin with. That in turn could help lift adoption of wallets.

Passwords and PINs are being rendered irrelevant thanks to rising digital fraud, growing concern about data privacy, and difficulty remembering an endless stream of letters and numbers. That’s been leading both software and hardware firms to explore new methods of verifying user identity. One such method is bio-metrics — unique biological measurements that can be digitized and turned into a traceable record.

These methods, which include fingerprint scanners, voice verification, or retina and vein scans, are steadily gaining popularity for unlocking smart-phones or accessing sensitive apps — BI Intelligence forecasts that by 2021, 99% of US smart-phones will be bio-metrics-enabled. But they’re also becoming increasingly popular as a way to verify payments, because they keep consumer data secure without inconveniencing consumers.

But as these methods are implemented, firms face unique security challenges. Because of the way biological data is stored and encrypted, it’s much harder for hackers to access and use. But if it is accessed, it’s extremely valuable, since biological data can’t be changed or replaced in the event of a breach. And though those risks could deter consumer, merchant, and vendor adoption, it appears as though most parties believe the benefits outweigh the risks and will likely implement bio-metrics-based authentication in their applications moving forward.

Jaime Toplin, research associate for BI Intelligence, Business Insider’s premium research service, has compiled a detailed report that sizes the market for bio-metrics-enabled smart-phones in the U.S., described various types of bio-metrics authentication, evaluates their utility in the payments space, investigates the potential security risks and hurdles to adoption for both front- and back-end applications, and assesses the types that are most likely to see widespread application.

Here are some key takeaways from the report:

  • US smart-phone makers are rapidly integrating bio-metrics-based features, such as fingerprint scanners, into their devices. BI Intelligence forecasts that 99% of installed smart-phones in the US will be equipped with fingerprint scanners by 2021. The shift will happen much sooner for the installed base of iPhones in the US — nearly all of which will be bio-metrics-enabled by 2018.
  • Bio-metric technology is moving beyond fingerprints. Right now, bio-metric verification is largely concentrated on fingerprint-scanning technology on mobile phones. But the technology is expanding, and other verification methods, including facial recognition and iris scanning, are becoming more popular.
  • Bio-metrics do poses their security challenges. The unique nature of bio-metric verification, and the fact that the digitized record is stored locally in a secure portion of the phone, makes this data far more protected than traditional verification methods. But the risk to this type of data is also greater because unique, permanent biological identifiers are very valuable to hackers.

In full, the report:

  • Forecasts the number of US smart-phones that will include fingerprint scanning technology through 2021 and assesses industry growth
  • Provides data showing why biometrics relieve pain points associated with in-store and online purchasing without eliminating security
  • Explores different types of biometrics and evaluates differ net payments use cases
  • Evaluates whether security risks and other challenges will hinder adoption of bio-metrics
  • Assesses which type of bio-metrics will become most popular among consumers and developers moving forward.

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