Two factor authentication coming to online card payments

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New EU regulations coming into effect next September are going to cause friction for online shoppers as payments will require two factor authentication. This will include either something you know (user name/password), something you have (mobile) or something you are (fingerprint, iris scan etc).

The problem is that whilst this is relatively easy to implement for mobile purchases, it’s a nightmare scenario for consumers shopping on a desktop and trying to pay by card. Why should you have to grab your phone to authenticate a desktop purchase for example and (although most modern laptops have fingerprint scanners built in), millions of consumers will still be using older devices.

That’s why companies like Mastercard are working hard to make two factor authentication as seamless as possible for consumers and naturally are predicting a significant increase in the use of biometric technology to authenticate who is paying. Although the heightened security measures are designed to protect consumers and businesses from being defrauded, Mastercard is working with banks and the rest of the industry to ensure they are implemented without ‘disrupting’ the convenience of payments for consumers.

“The use of passwords to authenticate someone is woefully outdated, with consumers forgetting them and retailers facing abandoned shopping baskets. In payments technology this is something we’re closing in on as we move from cash to card, password to thumbprint, and beyond to innovative technologies such as artificial intelligence. It’s far easier to authenticate with a thumbprint or a selfie, and it’s safer too.”
– Ajay Bhalla, President Global Enterprise Risk and Security, Mastercard

Mastercard has been leading the advancement of biometric technology in payments for years with a focus on improving both consumer experience and security online and offline.

Identity Check is one such example. This is an authentication solution that enables individuals to use biometric identifiers, such as fingerprint, iris and facial recognition to verify their identity using a mobile device during online shopping and banking activities. This solution dramatically speeds up the digital checkout time, improves security and reduces cart abandonment rates.

Mastercard is also testing a next generation biometric payment card, with an in-built fingerprint sensor. The card is being piloted in South Africa and can be used to verify in-store purchases without the need to upgrade existing payment terminals.

With this approach, Mastercard will help banks not only to comply with requirements set out in the new PSD2 legislation, but also to go further in optimising the checkout experience of their customers.


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