Despite a recent study by Finextra suggesting over half the world’s population will use mobile wallets by 2025, payment cards are set dominate the payment industry for the next decade as consumers lack trust in digital payments.
The past year has seen consumers and retailers move away from cash, but shoppers haven’t rushed to embrace mobile wallets as a replacement. According to McKinsey, more consumers reported a deteriorating perception of the security of digital payments over the past year (15%) than an improving one (11%). Similarly, while 64% of consumers say they trust banks, only 47% say the same for digital payments providers. This supports findings by PCM that payment cards will dominate the banking scene “until at least 2025”.
Contactless cards represented 73% of all card transactions last year, and more than 4.74 billion payment cards were shipped in 2019. Yet, despite 81% of those cards including chip and PIN security, unauthorised financial fraud losses from UK payment cards totalled £395.9million in 2019, and card-present fraud is still on the rise.
“The decline of cash payments over the last year has led many consumers to turn not to digital wallets, but to contactless payment cards for security, trust and convenience they can rely on. As a result, contactless cards will dominate the banking industry for years to come. It’s clear that banks and payment providers must acknowledge that ongoing consumer demand and explore fingerprint biometric authentication to deliver the next generation of payments to consumers and payment providers alike,” comments Phil Sealy, Research Director at ABI Research.
Consumer attachment to payment cards is already leading to a growth in the biometric payment card market, which UBS forecasts will generate more than $5billion in global revenue and account for 15% of the market by 2026.
“We’ve recently seen a momentous change in the payments industry: the fall of cash, the growth of digital wallets and the development of digital currencies. But one thing has remained constant— consumer demand for payment cards. Fingerprint biometric payment cards provide consumers with the convenience of a card and that much-needed security at the touch of a finger,” said Vince Graziani, CEO, IDEX Biometrics.
That demand for biometric payment cards has led to considerable momentum in the biometric payment technology industry in the past four years. Now, such a fingerprint biometric payment card is soon set to hit consumer wallets with the IDEX biometric sensor embedded in IDEMIA’s next generation biometric payment card representing a turning point for the payments industry and for consumers.
“Consumers will soon have fingerprint biometric payment cards in their wallets which is a significant milestone for the payments industry. With fingerprint biometric payment cards available to consumers, banks will gain a competitive edge by delivering the future of payments to their customers, in a format they know and trust,” continues Graziani.