Fingerprint encrypted cards: What’s the big deal and how will it affect you?

Fingerprint encrypted card

If you’ve ever used your fingerprint to unlock your phone or get access to your office then you’ve used “biometric authentication”. Biometric authentication is a way of using a person’s unique biological characteristics to verify that they are who they say they are. In this case – a fingerprint.

The reason companies like Apple and Samsung introduced fingerprint authentication into their mobile products is because it makes the users’ experience faster and more seamless. It’s a touch or a push of the home button – no PIN, password or fancy swipe patterns are required (other than as a backup). Similarly, office buildings and co-working spaces have started implementing fingerprint authentication. This makes it easier, quicker and safer for people to enter a building or office. No more scrambling to find your misplaced access card or tag in your pocket, handbag or briefcase.

This technology has moved into the card payment space. Mastercard recently unveiled their ‘next generation biometric card’ – known more simply as a fingerprint encrypted card.

How will the fingerprint encrypted card work?

The card will be the same as any current credit or debit card. The only difference is that it will have a fingerprint sensor embedded in it that is registered to the card holder.

Essentially, the fingerprint encryption will eliminate the need for a PIN entry. The customer will insert their chip card whilst holding their thumb on the embedded sensor and voila – the transaction is processed without the card ever leaving the customer’s hand.

Surely, a change this big is going to be costly and time consuming for the payments and banking industry? Having to register everyone’s fingerprint, issue new cards, and educate businesses and staff will be a long process. So how do the benefits outweigh the costs? Why is this still a worthwhile change?

Benefits of fingerprint encrypted cards

Expected decrease in fraud

The latest report from eNCA stated that losses due to card fraud cost South African consumers R700 million each year. 46% of this is attributed to lost or stolen cards, and 32% is due to counterfeit or copied cards.

A dramatic decrease in these statistics is anticipated with the introduction of fingerprint encrypted cards, as it would render the cards useless to thieves. Specific predictions on what the exact impact will be have not been released by Mastercard yet.

Improved experience for both consumers and sellers

Many security add-ons in the payment space might help to protect consumers, but they could also hamper the user experience. Think of 3D secure for online payments when you have to leave your computer to look for your phone that has the one time pin. Even having to add in your PIN instead of just swiping your card requires additional time.

“The customer is at the centre of this new innovation.  Fingerprint encrypted cards have not been designed to only make things more secure, but rather to make things simpler while making them secure.  This is the sort of innovation that excites us.” – Lungisa Matshoba, Yoco CTO

Biometric authentication will mean retailers can serve more customers at a faster rate (unless someone forgets their fingerprint.)

South African trials and launch

South Africa is the first market to test this new technology and two trials are underway with Pick ‘n Pay and Absa.

“The choice of South Africa for this critical pilot is a strong validation of how important South Africa’s role is in the global fintech space.” – Lungisa Matshoba, Yoco CTO.

Mastercard plans to launch a full rollout by the end of this year. Getting your hands on one of these cards will, however, depend on which bank you’re with and what their processes will be.

What does this mean for business owners?

Business owners will be able to enjoy faster moving queues, happier customers and a reduced chargeback risk. To learn more about what chargebacks are and how to protect your business from fraud, read this article.

The best news about this new technology is that business owners will get the additional security and benefits without having to cough up more money for extra hardware or software. The fingerprint encrypted cards will work on all Yoco card readers and our point of sale software. Mastercard has also hinted that a future card will include contactless technology (NFC). This will work with the Yoco Wireless PRO card reader.

The main thing business owners will need to take responsibility for is educating the staff who accept payments on behalf of the business. They should be prepared to ask customers what card they have to ensure they do not take the card away from the customer but rather hand over the card machine or Yoco card reader.

Watch the video below to find out more and see the new fingerprint encrypted cards in action.

Image and video credit: Engadget

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