Mobile payments are becoming an integral part of receivables for many companies but few have struck the right balance between online security and a sleek customer experience. Fingerprints could be the answer.

A recent survey by Kount found that almost four-fifths of merchants in the US actively support mobile channels for payments, despite the fact that more than half of those are not monitoring the share of fraud that comes from mobile. This is leaving companies vulnerable to all types of financial crime, from 'common or garden' fraud to cyber attacks from hacker groups.

And with 21 per cent of companies having completed an omni-channel payments programme and a further 50 per cent intending to do so within the next two years, it's clear that mobile channels will play a vital role in payments in future. Nonetheless, the survey by ACI Worldwide and PCM Research found that fewer than half of respondents had a coordinated set of security technology for each of their payment channels.

A recipe for payments disaster

With evident growth in mobile channels but a concurrent lack of preparation and investment in anti-fraud technology for mobile, many companies could be cooking up a recipe for payments disaster. So, while there may be no such thing as a 100 per cent fraud-proof payments system, how should they ensure that mobile payments are at least as secure as cheques or wire transfers?

What consumers want most

Unfortunately companies come up against resistance in implementing security in mobile channels. This is often attributed to consumer preference for an easy one-step payment process but it may have more to do with the retailer wanting to ensure that customers go all the way (i.e., “convert”) through to full payment rather than abandoning the shopping basket. It's true that consumers don't want to enter endless PINs, codes and jump through too many verification hoops – but what consumers want more than anything when making a mobile (or any online) payment is security. At the first whiff that the payment might not be secure, the mobile shopper will disappear into the ether. So online retailers need to strike the right balance between an easy payments experience at checkout, and a system that reassures the customer.

Fingerprint solutions

One solution that could solve this dilemma is fingerprint ID. The scan technology has been used for several years to unlock iPhones, saving users from the bore of remembering a four-digit PIN. It opened the door for user identification and has great potential use in payments, in which users could sign into accounts using the same fingerprint recognition technology, rather than providing other personal details such as email or first pet's name, etc. Wouldn't we all prefer to use our thumb rather than have to type in 'Miffy' or 'Mr Snuffles'?

An article written by Justin Benson, CEO of Spreedly, outlines some of the other beneficial uses of fingerprint authentication for credit cards:

• Fingerprint tracking at all payment points, whether using a mobile, on a computer or in a physical shop, can connect the user's spending behaviour across all the user's various activities. It's therefore a way of providing a uniform ID authentication for an omni-channel programme.
• Fingerprint ID can serve as a proxy for card data, which can be usefully used in loyalty programmes. If a company can track the customer's spending, it can offer that individual tailored offers or incentives.
• It also offers a way to have ID authentication from a potential customer, for example for a trial subscription to a product (such as an online magazine or service) without the customer having to enter credit card details, which puts a lot of people off.