Samsung and MasterCard are collaborating on a fingerprint payment card. How will this affect the future of money and security?

Samsung and MasterCard are collaborating on a fingerprint payment card. How will this affect the future of money and security?

Samsung Electronics and MasterCard have signed a Memorandum of Understanding (MoU) that will see the firms collaborating on incorporating fingerprint recognition into payment cards. The move has been made in a bid to increase security for both purchases and ATM, contactless transactions.

What is the Memorandum of Understanding?

The MoU seeks to integrate fingerprint authentication technology with contactless card transactions and credit and debit cards. The aim of the firm is to ease the way that customers pay for their goods by logging into their accounts through the fingerprint scanner. How will this work? Once consumers have registered a fingerprint, they can make transactions in stores and at ATMs with the card-holders’ fingerprint secured by the reader of the payment terminal. “We’re working together to transform payments and unlock new levels of convenience, security, and personalized options for consumers,” said Peter McKay, president of enterprise security and chief information officer, MasterCard.

Who are the two companies collaborating on fingerprint payment cards?

Samsung and MasterCard are looking to develop new fingerprint-based payment cards, allowing users to make payments with just their fingerprints. According to the companies, the smart cards can perform “near-field communications (NFC) transactions” in addition to the fingerprint readers, which are designed to replace the need for a traditional magnetic stripe card. Samsung plans to integrate the technology into its payment cards, including those that it already manufactures. Mastercard will focus on the supply chain and key players in the market, while Samsung will focus on security and software. How will fingerprint payment cards affect your day-to-day? Although the technical implementation will be impressive, it isn’t quite there yet.

What does the collaboration involve?

The deal will see Samsung and Mastercard working together on adapting the existing Samsung Pay mobile payment system to work as a stand-alone biometric payment option on the payment cards. This will enable the consumer to register their fingerprint and securely authenticate payments. While the biometric ID will not be stored in a centralized database, it will be protected in the traditional way – with the fingerprint being duplicated on both sides of the card. In addition, Samsung Pay, if used in conjunction with a banking app, will also act as a point-of-sale payment terminal, further boosting the security for the purchase of items and the ATM connection. Why are they doing this?

What are the advantages of the collaboration?

The initiative is being made in response to what is considered the most common security challenges in the use of traditional payment cards. Such risks include card fraud, fraud at the point of sale, and security breaches involving information stored on payment cards. The expansion of fingerprint authentication across a wider range of applications is a result of ongoing research on biometric authentication. The initial focus is to improve and broaden the use of fingerprint technology for authentication in Samsung Pay, enabling users to authenticate their payments with their fingerprint instead of traditional passwords. What will be the benefits? Fingerprint payment cards are said to offer several significant advantages. For example, fingerprint authentication will increase security in-store.

What are the disadvantages of the collaboration?

The biggest drawback with Samsung and MasterCard is that most debit and credit cards don’t feature fingerprint sensors. This is because it is typically not installed in major cards. It is going to be very difficult for people to sign up for this kind of technology and it is most likely going to be a niche market. Has the collaboration been successful so far? Although the industry is still very new and adoption rates are low, MasterCard and Samsung have achieved some success with just one million Samsung Pay users. This will make the project sustainable, but we should expect that this has not been able to reach a critical mass in the UK and the US. Samsung Pay is available on the iPhone 6 and above, Galaxy S5, and S7 smartphones.

How will this affect the future of money and security?

This agreement will enable Samsung Pay to be used with the Mastercard payments network, allowing consumers to make secure purchases from merchant terminals. What’s more, the first two Samsung Pay-compatible cards will be available in July this year, and these will have fingerprint authentication built-in, rather than a PIN code. However, Samsung also used the announcement as an opportunity to warn that hackers are able to breach the biometric systems used by Apple and Android, so the fingerprint process is more likely to be compromised. The companies said: “The point of fingerprint biometrics is to provide a more secure way to make payments, one that incorporates consumer preference and accessibility.

How will this affect the future of money and security?

According to the MoU, the companies will design and test “an improved security solution based on fingerprint recognition technology” and submit the design to industry standards organizations. The announcement comes as the financial services industry has pledged to trial a more secure contactless card system. A chip in the new cards will reportedly only record a single signature and not the user’s fingerprint. However, Mastercard said that the partnership is not related to the upcoming biometric ID cards it has been working on with the UK’s Home Office.

Conclusion

What do you think of these developments? Do you think Samsung and Mastercard are investing too much of their energy into this project? Would it make a difference? Share your views in the comments.

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