The digital payments landscape in India has grown at a rapid pace and scale over the last decade. Apart from its urban centres, the uptake of online payment mechanisms has also been promising in the country’s hinterlands, albeit with certain gaps yet to be bridged. If there is one word that can boost the usage of digital payment methods, it is trust.

For example, when a small business owner based in a village in Bihar, makes a payment to a raw-materials provider who resides across the country, it is a leap of faith. Similarly, a migrant worker needs the utmost assurance that his remittance will actually reach his family back home. This is to say that it is crucial to understand how trust can be established in this space to allow genuine transactions to flow through digital pipes without any hassles for transacting parties.

Authentication: The foundation of trust in the digital payment space

In the digital payment world, authentication is one of the most popular ways to establish much-needed trust. However, it still remains to be understood which authentication methods create the highest levels of credibility. Let’s look at why multifactor authentication is the most suitable method in most cases.

For multi-factor authentication, at least two of the following three ways are used for establishing the identity of the individual performing the transactions:

• Possession: Something that they have; for example, a documented identify or device etc.
• Knowledge: Something that they know; for example, a password or secret etc.
• Inherence: Something that they are; for example, their fingerprint, hand, face etc.

In contrast to possession and knowledge, inherence data like biometrics can’t be stolen, forgotten, exchanged or forged along with the security and accuracy it offers, making it the most preferred choice of authentication for digital payments.

A classic tool: The history of biometrics

If we think about biometrics, it’s as old a technique for identification as humans themselves, however, the modern commercial use of biometric authentication started around the middle of the 19th century with fingerprints by William James Herschel, a British administrator in India.

With increased penetration of feature-rich smartphones and other devices with high-resolution cameras, biometric authentication has started becoming popular among users and service providers on the back of its ease of use and reliability.

For rush shoppers, the ability to make payments without additional wait time is a delight in the true sense. Biometrics uses unique biological characteristics to identify individuals reliably and fast. Biometrics use physiological or behavioural measures for identifying individuals. Commonly utilised physiological measures are face recognition, fingerprints, iris or retina etc. If you’re looking for an example, look no further than your trusted Aadhaar Card! India’s Aadhaar project is the world’s largest biometric-based identification system and the cornerstone of reliable authentication in India.

The Aadhaar number is a 12-digit unique identity number issued to all Indian residents. This number is based on their biographic and biometric data (a photograph, ten fingerprints, two iris scans). Initially, the project has been linked to public subsidy and unemployment benefit schemes, but it now includes a payment scheme.

The growth of biometric payments in a post-pandemic world

Global surveys have found that the pandemic has accelerated the enthusiasm and interest around biometric payments. With a focus on hygiene and touchless payments, this popularity is sure to be maintained even after the pandemic passes. Issues with other authentication methods like not receiving OTP or lack of network have also increased the interest in biometric authentication. Biometric payments are gaining scale across Russia, South Africa, Kenya, Nigeria, Ukraine, India, and many other nations.

Consumers are identifying the merit in using a secure, fast and easy method such as Biometric payment. However, there are still challenges like a lack of awareness about these methods that India still needs to overcome. Biometric authentication has distinct advantages over possession and knowledge-based authentications:

• It’s universal, i.e., it’s found in all individuals
• Uniqueness. According to Sir Francis Galton's calculations, the probability of finding two similar fingerprints is one in 64 billion, even with identical twins (homozygotes). (Sir Francis was Darwin’s cousin.)
• It’s permanent, i.e., it doesn’t change over time
• It can be recorded based on user consent
• And finally, it is measurable for comparison and cannot be forged

Biometric authentication using statistical algorithms may have false positives leading to inaccurate results at times, which must be taken care of before making extreme decisions. However, at the end of the day, the advantages of using biometric authentication for digital payments are far more than the challenges. This is leading to a radical shift in its adoption and will continue to gain popularity across India’s vast and varied socio-economic landscape.

The author is Global head Payment security, Wibmo

DISCLAIMER: Views expressed are the author's own, and Outlook Money does not necessarily subscribe to them. Outlook Money shall not be responsible for any damage caused to any person/organisation directly or indirectly.