Biometric Payments: Building Trust for Wider Adoption in Fintech

Sam Kohli, Founder & CEO, PAYNT

Biometric security, utilising unique personal characteristics like fingerprints or facial recognition, has become an increasingly common part of daily life, from unlocking phones to authorising payments. Its appeal lies in its speed, efficiency, and relative security compared to other methods. However, the rapid adoption of biometrics is outstripping consumer trust.

A recent study by the Identity Theft Resource Center (ITRC) revealed that despite nearly 90% of respondents being asked to provide a biometric for identity verification in the past year, nearly two-thirds expressed significant concerns. Furthermore, 39% even advocated for a ban on biometric use for identity verification and/or recognition. With this scepticism around biometric security, how can fintechs prepare for biometric payments - a rapidly evolving new method of payments. 

Designing for Consent

To bridge the trust gap in fintech, "consent-first design" is crucial for biometric adoption. This means users give clear, revocable permission for data collection and use. For example, a digital wallet could offer optional biometric authentication, with local device-based matching and independent certification. This aligns with regulations like GDPR, which classifies biometric data as a special category requiring explicit consent.

Cultivating Trust Beyond Compliance

Regulatory compliance isn't enough for building user trust; users need to understand how their data is protected and that fintech systems prioritise their interests. Fintechs must integrate transparency as a core product feature. Consent-first design means regular reminders for users on biometric data location and deletion.

Additionally, consistent external audits or certifications bolster accountability and ensure fintechs adhere to recognized standards. While few consumers may scrutinize the details, the credible act of auditing significantly contributes to consumer trust.

In such an environment, trust can evolve into a significant competitive advantage. Transparent payment systems and processes will encounter fewer adoption barriers, generate fewer customer complaints, and exhibit stronger reputational resilience during incidents. Ultimately, a more open and consistent provider will see greater user adoption and engagement. In markets with low penetration, a consent-first design and a focus on trust will reassure users of their control over data, encouraging the adoption of newer, seamless payment methods.

As consumers become more digitally savvy and accustomed to easily switching service providers, building trust in biometrics will be a substantial contributor to fintech success.