Do You Trust Biometrics?

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John Benton and Anne Warner are feeling philosophical...

Faith. Before you reach for your rosary beads, we know that’s a curious start to an article in a business magazine, but the truth is that faith underlies every single business transaction we enter into. There must be faith in the quality of the goods and services on offer, there must be faith that the seller will be honest about his offerings, and above all, there must be faith that the buyer will pay for what they receive. While laws and regulations exist to ensure that these things do occur, we typically still take all of these things for granted when doing business – we retain our faith in others.

In recent times, however, the processes of cash handling and payment transfer have not enjoyed quite as much faith as before. Most of us have heard horror stories about identity theft, fraudulent transactions, credit card cloning, and so on. Stories of so-called skimming devices, which read information from our magnetic strips, or minuscule cameras which record our PINs, are enough to make even the most trusting person lose faith in the security of the system. Magnetic strip technology has become increasingly vulnerable to criminals, but, until now, it was enough to augment it by a better means of establishing the user’s identity – the PIN. But, although use of the PIN has substantially reduced losses, the problem of fraud still exists, in both ‘cardholder present’ transactions, and more markedly in the case of ‘cardholder not present’ transactions, which are now booming, thanks to the rise in online shopping.
 
The ATM world recognises the urgent need to establish identity verification better than anyone, and many operators are seriously considering more advanced forms of biometrics (the signature has been a well-used, if flawed, form of biometric identification for many years). It is an unfortunate fact that biometric science was not considered to be reliable enough at the time when the ATM began, but much has been achieved in biometric development since then. One of the first users of a biometric method for identity confirmation in connection with payment was a small grocery chain in the USA, known as ‘Piggly-Wiggly’. Like most supermarkets, the majority of their customers are regular weekly or monthly domestic people, and so establishing an in-house biometric database – in this case, fingerprints – was relatively easy, and the customers appreciated the convenience. The idea is now spreading across America.

There are many options to be considered – fingers, thumbs, facial structure, irises, etc. Currently, a combination of finger skin plus vein structure recognition is under test, but there are others to be researched. Retinal scanning was trialled some years ago by a British building society, but the customers were not enthusiastic, and so the idea was dropped. One point must be made – in many cases the original magnetic strip connection with the ATM has been retained in addition to the PIN system. The former is regarded as a fall-back in the event of PIN system failure. There is a temptation to revert, but this is unlikely to be tolerated by reputable operators at either end of the line.

Few of us have not come across somebody who has been the victim of identity theft. Some strengthening of the payment transfer system is urgently needed in order to retain that vital factor – Faith.