We are living in an era, where it’s common to find people carrying multiple cards, such as loyalty and travel cards, tickets and ID wherever we go. But why is that?
Perhaps it’s simply because nobody has suggested a decent alternative – yet. But the pandemic has changed much of our behaviour – many shops currently refuse to take cash, for hygiene reasons. Most UK payments are now made by card, with cash used in less than a quarter of all transactions up to June 2020 and contactless payments rapidly becoming the norm.
Many people prefer contactless payments because they are safer and easier than cash and, with contactless payment limits having been extended in response to COVID-19, they are becoming more widely accepted and convenient than ever. Of course, cash isn’t the only thing we carry in our wallets. As technologies advance, ID, loyalty cards, tickets and vouchers can also be stored on a single device: either on our phones or on a central card. Perhaps the very same card we use for payments.
And when the security on that single card is protected via biometrics, then suddenly our data, as well as our money, become far safer.
Are we on the brink of major and long-term changes in payment behaviour?
Apple certainly seems to think so. In July, the tech brand filed a patent for technology that will allow users to verify their identity without a passport, driver’s license or ID card. Instead, users can upload their information into a digital wallet which verifies the ID against national databases. Apple is looking beyond just payments - their digital wallets will hold passports and driver’s licenses, even library cards and travel passes so that we can manage our lives from one device without the need for a wallet.
However, take-up of mobile wallets has been slow, with many concerned about their safety and security. Figures from the end of 2019 showed that just 5% of payments around the world were carried out with a mobile wallet, as consumers continue to prefer physical transactions over mobile payments. Indeed, Apple themselves still haven’t given up on physical cards, having launched the metal credit card.
Since the pandemic, mobile wallet usage has risen thanks to their convenience – for instance, Australia’s CBA Bank revealed a 17% increase in customers paying through digital wallet transactions since March 2020. Shoppers are looking for ways to reduce the number of cards in their wallet, making it faster to tap-and-go securely for many different transactions. But many want a more secure or familiar way to manage their payments and banking than the mobile wallet.
One biometric card, many uses
Biometric fingerprint authentication is one such safe and convenient way to combine our wallet into one card. Biometric technology is already used to access our smartphones and payment apps securely. In much the same way, this multi-application authentication process can be incorporated into a physical payment card with a built-in biometric fingerprint sensor.
Consumers will be able to combine all the below services into one smart payment card, making the consumer experience more convenient, and free from bulky wallets.
Safer spending
Instead of using PINs and signatures while paying for goods, shoppers just hold their fingerprint to the sensor on their biometric payment card and tap a contactless Point of Sale (PoS). By adding touch-free fingerprint verification to the payment authentication process, contactless transaction limits could be eradicated entirely, and users benefit from not having to remember PINs for all transaction values.
Importantly, biometric smart cards only store the fingerprint on the card, and not in a central database, making them more trusted by consumers and virtually impossible to be hacked or stolen.
As Apple’s technology patent shows, traditional ID documents are likely to soon be a thing of the past.
Getting due rewards
To make the most of the many retail schemes in the market, you really need to keep all loyalty cards in one place, but that quickly weighs down a wallet. While we may not think about securing our loyalty cards – most don’t have PINs or even our names published on them – many can collect so many points their value reaches into the hundreds of pounds. With biometric authentication, multiple loyalty schemes can sit on one card, which is protected through end-to-end encryption and secured to the owner by their fingerprint.
Smarter ticketing
Public transport in major cities, such as New York and London, have already embraced contactless payments, allowing riders to tap and go. However, to get season tickets or travelcard pricing, travellers still need to buy physical tickets. Instead, biometric smart cards can hold seasonal transport tickets, allowing you to pay a better fare with contactless technology in a speedy and secure way.
Increasingly, as smart cities emerge, we will also start to see smart public transport ticketing. Through fingerprint biometrics, smart ticketing will connect the card to the person, making it easier to personalise and enhance our city living, providing us with more intelligent, safer and faster travel on public transportation systems.
Identification card
As Apple’s technology patent shows, traditional ID documents are likely to soon be a thing of the past. Workplace or even Government ID systems can use a biometric smart card providing a no-contact version of identity verification across borders or while moving about a city or a workplace. With the worry that communal fingerprint scanners are potential vectors for the spread of disease such cards will also minimise the need to touch shared security surfaces during travel or while entering a workplace.
Bringing it all together
In a world that is turning away from cash, and increasingly favours digital payments and identification, fingerprint biometric authentication has come of age at the perfect time. Now, a single biometric smart card can both drastically reduce the number of cards required – making it faster and easier to tap and go – and simultaneously make transactions more secure, safeguarding our most precious data and assets.
As biometric sensor technology advances, it’s not a case of ‘if’ a one-stop smart card replaces the traditional hefty wallet, but ‘when’. Banks offering this technology will have a clear differentiator and will gain top of wallet status.
By Paresh Davdra, Co-founder & CEO of RationalFX & Xendpay
The rise of FinTech has significantly altered the financial industry in the last decade. The disruptive nature of FinTech stems from the fact that its unique selling point is the use of innovative technology to enhance the lives of its customers. From mobile payments to crowdfunding platforms to new e-commerce systems, FinTech companies reflect the needs of a new generation of consumers who are looking for an easy to use service whether they are at home or on the move. It is perhaps not surprising then to note the incredible opportunity that exists for FinTech companies that allows them to pursue more than profit, and look to social responsibility as a key part of their model.
The importance of social responsibility for FinTech is intimately connected to the relationship between their audience – a new generation spanning millennials in their twenties and early thirties, and the students that will succeed them- aligned with their social conscience. This is a generation that has grown up with an awareness of issues for sustainability, social responsibility and the desire to make consumer decisions based on values. As a result, it is essential for FinTech companies to align themselves with their socially responsible audience.
This commitment to social responsibility is often reflected in the way that FinTech companies are able to do business. One sector in which this is most clear is in the payments industry. Payments have become instantaneous with the advancement of technologies; with industries such as online international payments having been able to emerge with the growth of FinTech. Whilst the business and consumer application has been a clear success with the proliferation of companies within the sector, a socially responsible aspect has also appeared through the way remittances are sent.
Remittances and the transfer of money between communities across the world has benefitted immensely from the FinTech revolution, with the number of remittances to developing countries growing by 51% to $445billion between 2007 and 2016.[1] It is clear that the availability of improved financial technology has contributed a great deal to this, with accessible mobile wallets and payment systems, such as allowing families in developing countries to receive funds from their loved ones faster than ever.
For the companies that offer these services, a sense of social responsibility is essential for the running of the business – they need to have an awareness of the needs and resources of communities in the developing countries they are serving. That is why apps will often be low cost and offer simplified functionality, designed to run on phones without access to super-fast connectivity. Furthermore, socially responsible FinTech has enabled the democratisation of remittances, allowing users to lessen the financial impact of heavy taxation in place when using money transfer services in certain countries or unreliable methods of transfer, and ensure that as much money as possible reaches its intended recipient. Some payment companies have even built their business model around the concept of responsibility and sustainability, waiving mandatory fees or commission to make sure communities benefit the most from transfers.
Xendpay is one such FinTech company, which has used its socially responsible ethos to offer families free money transfers around the pay-day period. By eliminating extraneous fees and commissions that are typically part of the service that high street agents offer, FinTech companies such as XendPay are directly impacting on the development of these societies – with more money available for the recipients of remittances, there is more money available to go back into the economy of a developing nation, rather than into private hands.
Social responsibility has become a symbol of the disruptive power of FinTech, at a time when traditional banking systems are slower to innovate. It is how an industry of imaginative FinTech companies operating within remote and developing communities have been able to evolve and provide customers with a service that works for them. Recent developments have even seen FinTech companies expand beyond simply providing mobile apps for customers, as socially responsible and ethical investing are increasingly an important aspect for modern business.
Traditional businesses looking to emulate the disruptive success of FinTech should look to the value-based ethos of the companies as a template. The FinTech industry has many examples of the future of business – ethical initiatives with a strong sense of social responsibility to the customers and communities they serve. FinTech companies have been able to capture the lucrative millennial market not only because they offer convenient and accessible services, but because of the key role that social responsibility plays in their corporate identity.
FinTech businesses realise the power that strong values have to play in bringing them closer to their audience and that they have a responsibility to align themselves with charitable and good causes, social development and issues that both the business and their customers are passionate about. This is an ethos that businesses across all sectors can learn from.
Websites:
https://www.xendpay.com/
https://www.rationalfx.com/
[1] Sending Money Home: Contributing to the SDGs, one family at a time, IFAD, 2017
Xero today announced the integration of Apple Pay through Stripe, making it even faster and easier for customers to get paid. Xero’s 862,000 subscribers can now offer their customers the ability to view and pay an invoice using Apple Pay through Stripe. Invoices paid with a payment service get paid almost 80 per cent faster than invoices that don’t offer a payment service. This new feature is available automatically to everyone on Xero using Stripe where Apple Pay is available.
Small business owners consistently point to delays in getting paid as one of their biggest pain points, which puts a strain on cash flow. Xero customers sent 15 million invoices globally in the last 30 days alone. And based on our current data, over 60 percent of those invoices will be paid late. Xero’s connection to the payment services of Stripe and Apple Pay will help address this concern for small businesses owners and help businesses get paid faster.
“Mobile payments are the way of the future,” said Craig Walker, Xero Chief Technology Officer. “Attaching a payment option to online invoices helps Xero customers get paid almost 80% faster than invoices that don’t use a payment service - so they spend less time chasing unpaid invoices for a more productive and cash healthy business.”
“By enabling these connections with payment services, small businesses are able to offer multiple payment options on an invoice, giving them and their customers choice of payment and also the ability to pay the invoice as soon as it arrives, ensuring they get paid faster,” Walker said.
Currently businesses that want to pay an invoice via credit card need to enter their credit card details to complete the payment. Credit card payments via Stripe mean that customers can confirm payment with Apple Pay using their fingerprint ID on their Apple device to confirm the payment quickly. Businesses who take payments via Stripe and Apple Pay also have an extra level of security. All payments made require a fingerprint or passcode, decreasing fraud, and with it, chargebacks.
"Almost a fifth of online commerce in the United States now happens on mobile devices,” said Cristina Cordova, Head of Business Development at Stripe. “We’re excited to work closely with Xero to help hundreds of thousands of businesses use Apple Pay to get their invoices paid with little more than a fingerprint.”
By connecting Xero users with Apple Pay transactions will be automatically entered and matched against invoices in Xero. Automating the invoicing reconciliation process makes accounting easier for small businesses.
"I advise my clients on the amazing ability Xero has of linking to online payment providers like Paypal and Stripe,” said Brad Sewitz, Logicca Chartered Accountants. “These services have changed the way my clients operate their business, reducing the unnecessary burden of data capturing and positively impacting their cash flow, allowing them to focus solely on what they do best - running their business."
“The small businesses we work with get paid quicker and have greater visibility into their receivables by using Xero invoices with an online payment provider like Stripe and Paypal, Mike Castle at Bond, Andiola & Company.
“With Xero, my clients reduce their dependency on paper checks and, in some cases, save themselves fees associated with having check scanners.”
(Source: Xero)
