2022 – The year that facial recognition will lead the fintech industry
By Anton Nazarkin, Global Business Development Director of VisionLabs
The year 2022 has many innovations and advancements in technology coming our way, with the Metaverse already capturing our imagination. However, what does this year have in store for the FinTech industry and what is going to change it the most?
In 2020, contactless transactions hit its highest rate since 2015. Since then, the pandemic has demonstrated both the necessity, and desire from consumers, for truly contactless methods of payment. It is clear that facial recognition, as a transaction method, will continue to grow throughout 2022 and beyond. But what does this growth actually look like?
Facial recognition will have a global impact on the future of payments
2022 we will see increases in the transaction limits for facial recognition payments through smartphones and other devices, whilst some vendors will use facial recognition terminals for any-and-all payments. Physical credit, debit and prepaid cards are already being replaced by the new methods of handling transactions at a rapid rate, through the means of mobile payments and digital wallet services. In late 2021, Apple increased the limit on contactless transactions demonstrating consumers desire to adopt contactless methods. In most cases, the card number or the identity of the cardholder aren’t shared with the merchant during contactless payments, meaning if integrated with face biometrics the need for a transaction amount limit could be removed.
The introduction of facial recognition terminals is the next generation of this truly contactless payments experience. Through removing the need for smartphones to store, or process the biometric data, and installing facial recognition terminals at point of purchase, a seamless customer experience can be achieved. No longer does a phone need to be tapped against an NFC reader for a transaction to occur.
As the most secure method for confirming a person’s identity during the payment process, face biometrics will greatly reduce the possibility of card and payment fraud. This not only has the benefit of protecting the customer, but can also help governments and businesses fight money laundering and other fraud issues. These vast improvements in security, provided by face recognition technology, will only continue to increase the adoption rate of facial recognition in the payments process.
Facial recognition technology will continue to improve and evolve. VisionLabs software can already recognize facial biometric data when an individual is wearing a mask, due to the precise levels of accuracy and one-shot liveness check – whereas many other ‘standard’ technologies still struggle to achieve this. The pandemic will mean many individuals will continue to wear a mask in crowded and public places, so evolving facial recognition technology to this high-level of accuracy will be a key trend in 2022 and beyond, with VisionLabs leading the way.
Why facial recognition will overtake traditional payments in the future and when!
Facial recognition payments account for 40% of the total number of transactions in 2 years, in VisionLabs’ implemented projects. The convenience and high level of usability contribute to this level of adoption, moreover the seamless and contactless experience that facial recognition payment methods provide increase adoption as consumers are always looking for a smoother, safer and speedier way to purchase – fitting into their increasingly busy lives.
For businesses and banks, the implementation of facial recognition can prevent chargeback fraud. When a purchase is made, and the similarity score identifies the purchaser is who they say they are, the face image is saved alongside the transaction. If a dispute from the consumer is then initiated, banks and businesses will have the evidence that the consumer was indeed the person making the transaction.
Chargeback fraud can also occur when the fraudster has a friend or family member make the purchase with their card, then claim the money back. Within your card, or bank, contract you will also not be allowed to share your debit or credit card with another individual however no businesses check ID when making transactions. Introducing facial recognition into the transaction process can therefore greatly reduce the impact of fraud, providing yet another reason why facial recognition will overtake traditional payments.
Who is leading the charge?
Today the countries who lead in the number of citizens adopting facial recognition payments are China and Russia; while trials of this technology are ongoing in many other countries of the world. The reason for this is the long adopted and working regulation on biometric data, including its collection, management and storage. Whereas many other countries are yet to adopt or even develop balanced biometric data regulations, which greatly slows down the adoption of facial recognition technology.
The difference between these two leaders is that China began introducing facial biometric data as a second factor for identity verification much earlier. However, Russia has moved to a pure face payment experience, although transaction limits are still being imposed.
The key advancement in 2022 will be that regulations will become more widely adopted. Moreover, whilst countries around the globe have individual laws and restrictions on facial recognition, a global, or at least market wide, regulation is likely to be put in place during the course of the next year – setting the world up for a boom in facial recognition towards the end of 2022 and into 2023.
2022 – The year for facial recognition
In 2022, the FinTech industry will continue to adopt facial recognition at a faster rate for a multitude of reasons; the customer experience, and benefits to business are too hard to ignore, whilst issues with regulations and laws is expected to be overcome allowing for widespread expansion of facial recognition into retailers, banks and vendors of all kinds.