Payment Cards Are Morphing into Tiny Computers
It’s an amazing little development. Last Friday, MasterCard and a Norwegian-based company called Zwipe introduced an NFC-enabled credit card with a built-in fingerprint reader. Rather than use a PIN for verification, the card owner simply holds their thumb over the reader for verification as the card is swiped. The card also contains a chip for use at terminals that can’t accept contactless payment.
The companies held trials in Norway over the past few months and will begin issuing the biometric-based cards in European markets during 2015. According to MasterCard executives, this is just the beginning of the use of biometrics for making secure payments. The company said it’s researching the use of facial, iris, voice and even vein recognition as future methods of payment — perhaps the body could replace the card altogether at some point.
The announcement came a few days before Apple’s biometric-based payment system is to go live. The two are not necessarily competing payment methods, and Apple Pay will raise awareness of biometrics and NFC among consumers and retailers. The next generation of payment cards will be technical marvels: these aren’t just cards but extremely thin, dedicated computers that can store, read and match biometric information, harvest energy from point-of-sale terminals, run complex algorithms for verification and make an immediate wireless connection to a network. There are many technology enablers coming together. It’s an impressive step forward.
When it rains, it pours. The market for payment cards is developing, with several universal card devices recently making the headlines. These devices are capable of storing and impersonating many different cards, eliminating the need to carry a pile of payment and loyalty cards. There are currently two competing start-ups looking to become the universal card of choice: Coin and Plastc. Each uses Bluetooth to connect to the user’s smartphone for geo-fencing, and has a small e-ink display to show card information. Plastc goes one step further by including NFC. These are impressive, hyper-tiny computing devices, though neither is using biometrics in their first iteration.
Point-of-sale payments are changing — NFC and biometrics will play important roles, and smartphones could as well. The roll-out of Apple Pay, which begins today, will be an interesting test for touch-and-swipe payment methods. Apple has been able to take a central mindshare role in the use of handsets for purchases, and other handset makers are likely to follow. Payment cards are evolving into miniature mobile computing devices, and mobiles are evolving into payment card solutions.
After more than a decade of discussion, change is on the cards. The timing feels right.
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