Beats which replace passwords

02-07-2018 | Redacción CEU

The future implementation of biometric systems as a new payment method is closer than it might seem at first. Our fingerprints, voices, faces, the iris of the eyes or even our heartbeats might become our new credit cards. The more the development of biometrics is progressing, the faster cash and plastics are being left behind. What will the future of payment methods be like? What does the biometric system implementation promise? How will the arrival of the invisible payment affect the personal finance sector?


Throughout our lives, we sign up for different services, register on different platforms and use a multitude of devices. Obsolescence does nothing but encourage this last aspect. As a result, we end up accumulating a considerable number of passwords which we use for different purposes, being perhaps the protection of our personal finances one of the most important. It is not surprising that the most quick-witted users end up designing a complex mnemonic system to remember them or that the most forgetful people use repeated codes, that way reducing the security of their credentials.

Of course, there is always the last option of resorting to the helpful emergency service that says: "Have you forgotten your password?". Most providers offer the possibility of recovering a password thanks to the sending of a code through an SMS, the answer to a series of questions or an activation email. This is a tedious process, but until now it has been necessary for our digital survival. Biometric systems have set out to bring an end to this situation. Their arrival converts pin codes and passwords into obsolete tools. The particularities, physical features and behaviors of people will be themselves the new authentication methods.

Change in mindset

Digitization has had an impact on all sectors. In the financial world and, specifically, in the sector of payment methods it is facilitating a change of mentality. Contactless technology has been enthusiastically welcomed by buyers. Users rely more and more on their cellphones and the applications that they download. Online payment is no longer a behavior that generates friction. It seems that the development leads us to a future where cash and, even, the use of credit cards might become less and less necessary.

It is worth mentioning the case of China. The Asian giant has become one of the leading countries in digital payment. This leadership is due in part to the success of Wechat as a social network that integrates and unifies services. Its users not only use this platform to socialize, but also as a payment method. The Chinese company Alibaba is also betting on biometrics for payments. Clients who have a digital wallet on Alipay can pay in the KFK chain thanks to the "Smile to pay" recognition system and their telephone number. However, it is important to point out that the use of credit cards in China didn't use to be as widespread as in other countries. Customers used to use cash for payments. A fact that has facilitated this transition.

One of the challenges that the biometric system promoters face is precisely how to achieve that the society is receptive and adapts quickly to this new technology, as it has happened in China. At first, this point does not seem to set out problems, especially among the younger generations. A study carried out by MasterCard and the University of Oxford reveals that 90% of users of financial services are willing to adopt these new systems. However, until now this technology has been used in supervised environments like in airport controls. From now on, people will have to adapt to new environments on their own, such as in the case of cellphones. This same report shows that only 36% of users are familiar with biometric systems.

The future implementation of biometrics in finance also depends on the level of predisposition from the business world to adopt this type of digital payment. At the moment, the industry is not reluctant, it seems to bet more and more on this technology. In particular, 66% of the companies interviewed in the aforementioned report are planning to implement biometric systems in the coming years. However, companies will also take into account factors such as the cost of facing this challenge.

Beats which replace passwords

On the way to the invisible payment

One of the key factors that is promoting the development of biometrics in the financial sector is the security level offered by these systems. Biometric authentication techniques offer trust, since their recognition promises to be unequivocal. Therefore, this technology contributes to reducing the risk of fraud and the identity theft, it even helps to combat the underground economy.

However, the adoption of this technology must go hand in hand with an appropriate development and evolution of the methods that guarantee the safety of the operations based on biometrics. Fingerprints cannot be stolen, but their characteristics are susceptible to be reproduced for criminal purposes. This is where behavioral biometrics comes into play. This is new trend which allows us to use variables linked to our particularities like our way of writing, walking, moving or even the way our heart beats.

If this technology seems to have the fertile ground for its development, it is largely due to the society's demand for greater practicality, cost reduction, convenience and speed of payments. We move towards a society where the invisible payments seem to be more and more clear on the horizon. Going through the cash register in order to pay, waiting in lines or taking the wallet out of  our pockets can become trivial habits. More and more companies are working on the development of these alternatives that will make this futuristic forecast a reality.

At The CEU IAM Business School we are aware of the transformation which the financial sector faces due to the challenges set out by the digitization and the effects of fintech emergence. For this reason, we have designed an Advanced Programme in Digital Finance, FINTECH that focuses on issues such as the potential of mobile payments, Blockchain technology, Bitcoin, Crowdfunding, Big data, Cybersecurity, wallets or online brokers.