Calling all payment tech junkies:
Emerging innovations gather steam

By Michael Lloyd

Technology is radically altering the way UK consumers pay for things. Physically inserting a card at a pay terminal is quickly becoming "old-fashioned," and paying with cash is almost unheard of. Tapping your card -- or, preferably, your phone or some other device -- is the "in" way to pay.

In 2015, British shoppers made more than one billion contactless purchases, according to the UK Cards Association. Contactless payments are becoming ever more common, thanks to the growth of the Internet of Things (IoT) and the rising popularity of wearables. Tech firms and transaction processors can embed payment technology into pretty much anything, including clothing, jewellery, cars or kitchen appliances.

The growing popularity of contactless FinTech -- financial technology -- is driving a new wave of payment advances that are only just beginning to make their way into the hands of cardholders. The 2016 Consumer Electronics Show (CES) in Las Vegas, and the Mobile World Congress (MWC) in Barcelona were awash with payment innovations.

Here are some unique items you can be on the lookout for in 2016:

1. MasterCard selfie authentication.

Photo courtesy of MasterCard   

Payment processor MasterCard used MWC 2016 to show off its new selfie ID Check. The app, which is due to roll out across Europe and the US in
the second half of 2016, allows users to authenticate their identity by centring their face in their phone's front-facing camera. Their image is then checked against a photo saved in the app. To cut fraud, users must blink
to prove the image in front of the camera isn't a photo. 

"MasterCard's selfie authentication system could potentially have great security implications if used in conjunction with other authentication mechanisms, such as PINs, passwords, or even tokens," senior e-threat analyst at online security firm Bitdefender Liviu Arsene said in response to emailed questions.

MasterCard also said at MWC that it was looking to use iris scans, voice recognition and heartbeat recognition as payment authentication methods
in the future.

2. ‘I'll pay with Google'.
Search giant Google now has an app that allows you to pay for things by simply saying so aloud. The firm's Hands Free Payments app lets you settle your bill by telling a cashier, "I'll pay with Google." The cashier then confirms your identity by checking your initials and a photo you must upload to the app prior to use.

"While [the app is] currently relying on a human to do the facial recognition for validating the transaction, [Google] did say they'll start using facial recognition software and high-definition video cameras in the future," Arsene said. "The problem with this is that it's prone to abuse, as you're relying on features that can be copied via various methods ranging from makeup to plastic surgery, in really extreme cases."

Google began piloting the app at a number of US restaurants at the beginning of March 2016.

3. Expansion of the IoT.

Photo courtesy of Samsung

At MWC 2016, Visa announced its Visa Ready programme - a major push to help companies get payment tech into their wares. As IoT technology grows and wearables mature, you'll soon have the option of paying for things by waiving your shirt sleeve or ring in front of a POS system. You'll also be able to programme your refrigerator or car to make purchases for you.

MasterCard revealed a similar plan in 2015. Its program partners with a celebrity fashion designer, an automaker and a jewellery company.

As fascinating as the IoT is as it spreads, Arsene said it shouldn't be the sole authentication mechanism for payments.

"Your smartwatch, smart band, or any other wearable could easily be misplaced and used by criminals the same way they would use your stolen credit card to do online shopping," she said. "While all these alternatives have great practical applications, they should be used as a second authentication mechanism following PINs or passwords."

She did note, however, that since the authentication methods required from such payment methods require so little interaction, they have the potential to replace physical tokens or other out-of-hand authentication mechanisms.

4. Credit card innovations.
Physical cards may appear to be going by the wayside, but there are plenty of developments happening for plastic, too.

For instance, South Korean hardware maker LG is reportedly working on a "universal" credit card to complement its LG Pay service. The LG Pay White Card will store multiple credit, debit and rewards cards, allowing users to do away with their wallets altogether. Start-ups Coin and Plastc have launched similar devices.

However, with so many payment innovations promising to make a physical card a thing of the past, it remains to be seen whether consumers will be keen on carrying a new physical device.  

Photo courtesy of Barclaycard

A more useful product right now is Barclaycard's new virtual card replacement service. According to research from the card issuer, 2.7 million Brits lost their credit card at least once in 2015. With the new virtual replacement service, Barclaycard consumers who lose their credit card can call customer service and have a replacement card instantly available for download and use on their smartphone.

See related: Biometrics aim to make payments more secure, Pay friends via mobile with P2P payments



Published: 4 March 2016