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Is Biometric Verification the Future of Online Payment Authorizations?

Online shopping was already the number one preferred method of shopping, and with the recent “stay home” orders from the pandemic, the world of e-commerce has seen a drastic increase in online purchases. Now, more than ever before, this flux of online shoppers has caused e-commerce businesses to not only step their game up in inventory management and customer acquisition but also in secure online payments.

Before this pandemic economic shift, consumers had the option to shop from the comfort of their own homes but now the general public is being forced to do so. That’s not necessarily a bad thing, by any means… But as the number of online shoppers increases, it also means that the risk becomes greater for businesses to endure fraud and identity theft of customers.

Of course, when starting an online business, you learn how to make a website, but in learning that, there’s no rule book or cheat code that educates business owners on the risk of fraudulent transactions or just how customers are at risk of identity theft as well. Unfortunately, business owners typically don’t find out a transaction is fraudulent until months and even years down the road.

According to the Federal Trade Commission, there were 32 million identity theft and fraud reports received in 2019 alone. That number will only increase if business owners don’t take extra efforts to keep their businesses and customers protected against these cyber threats.

Ultimately, consumers are protected from the costs of unauthorized purchases made with their cards under federal laws and issuer card network terms and policies. But someone has to be responsible for those damages, and guess who it is… financial institutions and the merchants (you) assume responsibility.

You, of course, have the option of implementing strict authentication processes like strong passwords to safeguard your business, but when it comes to processing online payments and the safety of your customers, you’re going to need a stronger form of security, and biometric verification is the safest way to reduce security issues with e-commerce businesses.

In fact, biometric verification is proving to be the future for the way e-commerce businesses authorize online payments, and here’s why:

Biometric verification is becoming a mandatory standard amongst various card providers

Back in April of 2019, Mastercard announced its option of choosing biometric verification as an option to cardholders to verify their identity when making online purchases. This was a huge move for Mastercard because this made any and all financial institutions that offer cards with the Mastercard symbol on it give consumers the option of biometric verification.

By Mastercard making biometrics verification an optional standard to all cardholders, it’s likely that other financial institutions will follow suit, especially given that a survey conducted by Mastercard revealed that over 90% of consumers and banking/financial professionals prefer biometrics over any other verification method.

Conversion rates are improved

Biometrics seems to only be beneficial to customers, right? Well, seemingly so, but you, the merchant, also benefit from biometric verification as well, by way of improved conversion rates.

How are conversion rates improved through biometrics?

Through your user experience. As you know, customers are very demanding and they don’t have time to waste trying to figure out how to checkout… In other words, customers want a speedy checkout with no hassles. By implementing biometric verification to your checkout process, checkout times have proven to be cut by over 80%. With that, cart abandonment is reduced, which in turn, causes conversion rates to rise.

But coming to this beneficial conclusion was not so easy at first. Before biometric verification became an option for e-commerce businesses, owners of these sites were faced with the dilemma of providing customers with quick checkout processes all while increasing their security measures. The only problem was that increasing security measures was time-consuming for customers.

So e-commerce business owners were faced with having to pick the lesser of two evils: lose money due to fraudulent transactions or lose money to customers abandoning their virtual shopping carts. Most businesses opted for the safer option of losing money to abandoned shopping carts. But fortunately, biometrics technology was formed and gave businesses a safer payment authorization process.

Payment regulations prove to be favorable of biometrics

Payment regulations have placed a major focus on Strong Consumer Authentication (SCA), which is directed towards online payments where cards aren’t present at purchase, making it difficult to verify if the customer is an authorized cardholder.

Authentication systems that are approved by the SCA include the following:

  • Biometric verification (fingerprints, facial recognition, scanning of the iris, etc)
  • Material possession verification (mobile phone, credit card, etc)
  • Information verification (password, pin number, questions, etc)

If you look closely at these different verification methods, you’ll see that the authentication requirements are what a customer is (biometrics), what they have (possession), and what they know (information). These are verification methods that are unique only to the actual customer, making it easier to verify an unauthorized user.


Biometric verification proves to be a very beneficial verification method for online payment authentication among e-commerce businesses. By incorporating this into your business’ checkout process you, your business, and customers will be better protected against fraudulent transactions.

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