Contactless payments development trends that are worth paying attention to
The opportunity to pay for goods and services simply by attaching a card or smartphone to a POS terminal — the best and most convenient thing that fintech has given us in recent years. Thanks to contactless payment technology, the payment process has become as seamless as possible, faster and more understandable for everyone. Thanks to this the cashless segment is so actively growing in Ukraine, and trading networks are improving the quality of service. During the last 5 years, the payment habit of a Ukrainian has changed fundamentally — this is wonderful. Is this the limit in streamlining and optimizing a payment? Of course not. I will try to tell you how the current technology is improving right now.
Everything is obvious here — the more popular the payment technology, the more attempts to crack it. PIN-code has long ceased to be the most reliable way to protect against fraud, and now we see how the payment security technologies are developing as hard as the payment technologies themselves.
The most understandable and actively used solution is biometrics. Touch ID, Face ID and their analogues are used for payments in mobile wallets from Apple and Google, and in online commerce — thanks to them. This payment confirmation has become widespread. But this doesn’t mean it can not be finalized. The most promising technology here is heartbeat authentication, with which several startups are working right now. It is connected with wearable devices — but I’ll talk about them a bit later.
Nevertheless, they also work on the card products themselves — the “plastic” doesn’t disappear anywhere, but becomes more and more functional. For example, the upcoming Apple Card: there are no designations on it (card number, CVV code or expiration date). For security reasons, this information is not disclosed even to the cardholder. On a physical map, the number is encoded in a magnetic stripe.
In addition, international payment systems are working on a card with built-in fingerprint sensors — at the same time, reliable digital identification systems are created on the basis of the blockchain, which temporarily give the business access to an individual payment identifier at the client’s request. Simply put, the merchant no longer sends all billing information.
Wearable devices focus
2–3 years ago, everyone said that payments would move from card to phone (which partly happened), now there is a real boom in payments on wearable devices. Naturally, the trend began with Apple Watch, in which payments are possible through Apple Pay. With the development of analogues on Android, the technology went to the masses — especially when Xiaomi added NFC technology to its Mi Band fitness bracelets (from the gen 3 model).
Payment from such devices works in conjunction with a smartphone, which, of course, is more convenient and involves risks of data protection and identification. Now the NFC-practice “pay with watch” finds its application in rings, keys — and, accordingly, new methods of protection . As I said, heartbeat identification is the most promising method.
It is a little offtopic, but I will still say about QR codes, which have already begun to introduce as an alternative to contactless payments in Ukraine. The main reason is the desire to reach customers who don’t have an NFC-module in the smartphone, but have a camera in it. One-time QR generated at a terminal is an excellent protection in which data is encrypted. What stresses QR payments the most is the instantaneousness and low cost of infrastructure deployment. Protection here doesn’t require hardware capacity, but only software, as it is, for example, in Chinese WeChat Pay.