Authentication techniques are the key to safer payments, especially in the card-not-present situations as in mobile payments. Several manufacturers are trying different ways to provide safer payment environments such as the fingerprint identification in Apple iPhone or the retina scanning offered by several other manufacturers. Another verification technique which many companies are currently piloting is Facial Recognition. Facial recognition based authentication is performed by matching a live facial image of a person with the person’s stored image for the transaction to be successful.
American Express is offering its customers pioneering services using wearable technology through the facial recognition software. In the company’s lab, the American Express EG Rapid Prototyping team has developed a facial recognition system for mobile applications which enables customers to access their account information securely using the facial mapping software. However, it is still in the beta phase as the company wants to test it thoroughly in various risk scenarios to ensure security and longevity.
American express is also moving into the NFC space in partnership with the fitness-band maker ‘Jawbone’ by allowing customers to purchase goods using the NFC enabled future fitness band. This development seems to be a stepping stone for a larger concept, that is the Internet of Things (IOT). Incorporation of internet capability into more and more devices leads to increase in payment endpoints allowing the payment services companies to earn more fees from the expanded market. Seeing this as an opportunity to capitalize on, Visa announced the opening of a new office with 500 employees whose mission isto ensure that every internet connected device will be a secure place for commerce. Our White paper on “All the 12 payment enabling technologies and 54 illustrative Companies” discusses more on this subject.
American Express is not the only financial services provider piloting facial recognition. Recently, MasterCard also completed its voice and facial recognition payment trials. It created an experimental mobile app and tested it in an e-commerce environment over 14,000 transactions using both iOS and Android mobile devices.
PayPal also has a facial recognition and verification app for mobile payments users in London. This app has a tab labeled “Local” which helps users find nearby stores and restaurants that accept PayPal payments. When the customers check into the store, their name and photo appears on the store’s PayPal app. Customers can then make payment using the PayPal app.
Alibaba, one of the largest e-commerce giants in China, also tested its facial recognition software recently for its mobile payments division, Alipay. The service is called “Smile To Pay” which is still in its beta phase. In this system, the facial recognition based authentication is performed by matching a live facial image of a person with a stored image to positively identify the buyer. The technology is being developed by Ant Financial, a subsidiary of Alibaba which also operates Alipay.