Mastercard’s Pilot Biometric Payment Program Raises Privacy Concerns

The system allows customers to check out with the swipe of their hand or a smile.

May 19, 2022

Facial Scanning

ALEXANDRIA, Va.—Mastercard is testing biometric technology that allows customers to check out with a hand scan or facial recognition, according to the company. Participants in Mastercard's Biometric Checkout Program can enroll in a store or at home through a merchant or identity provider app. Once enrolled, card holders can check their bill at a retailer and either smile into a camera or wave their hand over a reader to pay.

“The way we pay needs to keep pace with the way we live, work and do business, offering choice to consumers with the highest levels of security,” said Ajay Bhalla, president, cyber and intelligence at Mastercard. “Our goal with this new program is to make shopping a great experience for consumers and merchants alike, providing the best of both security and convenience.”

For merchants, Mastercard says the program offers faster transaction times and shorter checkout lines, plus better hygiene and heightened security. The payments system can be integrated with loyalty programs and personalized recommendations to help consumers find products they might be interested in based on previous purchases.

The first pilot launched this week in Brazil with Payface and St Marche. The pilot will see Payface’s technology implemented across five St Marche supermarkets in São Paulo. Consumers visiting these supermarkets are able to enroll their face and payment information through the Payface app. Mastercard says it plans to bring the program to the U.S., Europe, the Middle East and Asia at a later date.

“All the research that we’ve done has told us that consumers love biometrics,” Bhalla told CNBC. “They want making a payment at a store to be as convenient as opening their phone.”

About 1.4 billion people are expected to use facial recognition technology to authenticate a payment by 2025, more than doubling from 671 million in 2020, reports CNBC. Mastercard says that globally, 74% of consumers have a positive attitude towards biometric technology, and the market for contactless biometrics technology is projected to reach $18.6 billion by 2026.

Mastercard wants to eventually make the tech “globally interoperable,” Bhalla told CNBC. “So, once you’ve stored your credentials, you could use this anywhere.”

Mastercard says that the data the program participants store in its system is encrypted in a way that protects consumer privacy, as their biometric information is replaced with a token and then linked to their payment card. The company told CNBC it has created a set of standards to ensure users’ data is protected.

U.S. airports are increasingly utilizing biometric screening to automate processes, and many of the latest biometric developments use facial recognition, which is 99.5% accurate, according to the National Institute of Standards and Technology. One of the most recognizable biometrics operator in airports is CLEAR, which is a subscription-based service where members pay $179 a year and use iris scans and fingerprints to advance travelers past TSA lines. CLEAR recently launched CLEAR Health Pass, which is a digital health record, free to users, that clears an individual based on things like vaccine requirements for expedited admission at participating sports venues.

Privacy remains a major concern for biometric screening, so programs remain opt in, but a 2021 passenger survey by the International Air Transport Association found that 73% of passengers are willing to share their biometric data to improve airport processes, up from 46% in 2019.

An arena that Mastercard’s biometric payment system could thrive in is the metaverse. Bhalla told CNBC that the program could help with the development of payments infrastructure for virtual reality.

Mastercard is developing an augmented reality headset that warns the wearer if they’re on a potentially fraudulent e-commerce site, and another feature of the headset allows users to select and buy items at a virtual store using their eyes only.

Bhalla also told CNBC that people could eventually try on clothes virtually before buying or link their non-fungible tokens—digital assets that record ownership of a virtual item on the blockchain—with their biometric identity.

Earlier this month, software firm Clearview AI agreed to stop selling or sharing its database of billions of facial images it gathered from LinkedIn, Facebook and other sources in the U.S. to commercial clients under a legal settlement with the American Civil Liberties Union, which alleged that Clearview violated the Biometric Information Privacy Act. The firm can continue to sell the images in its database to banks, law enforcement agencies and government agencies.

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