Biometric identification is considered the next step in preventing card-not-present (CNP) fraud. CNP fraud occurs when a criminal makes unauthorized purchases using stolen credit or debit card information, without physically possessing the card.
Biometric identification uses unique physical or behavioral characteristics, such as fingerprints, facial recognition, or voice recognition, to verify a customer’s identity before authorizing a transaction. By using biometric technology, merchants and financial institutions can reduce the risk of CNP fraud and increase customer security.
In addition to preventing fraud, biometric identification can also streamline the checkout process for customers, as they no longer need to remember and enter passwords or PINs. This can lead to a more convenient and efficient shopping experience.
While biometric identification has its benefits, it is important to consider privacy concerns and ensure that data is stored securely. Additionally, not all consumers may be comfortable with providing their biometric information, so alternative methods of identification should also be available.
In the month of January, Mastercard announced that by the second quarter of 2019, the majority of customers would be in a position to identify themselves by biometric Identification. The demand for these techniques has been fueled by the growth in technology for mobile devices and online purchasing methods. These innovations bring with them a higher chance of identity theft as well as theft of credit card numbers. This has led to a demand for safe and secure payments on the Internet.
The first installment of 3D Secure which is a secure online payment method relied on pre-set passwords already set by the financial institution linked to the card. The password was then entered into a pop-up window during the checkout process. Once the identity of the buyer was confirmed to be genuine the checkout process could then be complete.
3D Secure proved a reliable method for identifying individuals and preventing fraudulent transactions. However, with the advent of new eCommerce platforms as well as more creative fraudsters, there was a need for better methods of identity verification.
Today, most mobile phones have biometric identification capabilities, so the 2nd Version of 3D Secure will take advantage of this. Version 2 will incorporate biometric identification tools like fingerprint scanning as well as iris scanning and facial recognition. This is because these are easily integrated with technologies in mobile phones.
3D secure 2 employs the method of risk-based authentication based on risk which means that customers be required to take additional security measures if the amount of risk in transactions is determined to be less than a specific threshold. This allows for frictionless flow and streamlines the experience for around 95 percent of customers.
Mastercard’s announcement is the first step toward the commonality of the biometric check-out technology. All banks that offer Mastercard credit cards with a Mastercard logo must offer the option of biometric authentication to every user. Biometrics are currently believed to be the preferred method preferred for identity verification and we can therefore be sure that the other creditors will try to follow Mastercard’s example.
Additionally, the payment regulations are in favor of biometrics. The new requirements for regulation in the EU in The second Payment Services Directive have placed a focus on the use of biometrics for validating card-making digital transactions, and where it can be difficult to confirm if the person purchasing is the card’s owner who is authorized. Strong Consumer Authentication (SCA) is specifically designed for this.
SCA authorization systems make use of three distinct kinds of information that are independent to confirm the identity of customers. Three verification elements have to be supplied for the authentication of the transaction. The three verification elements include:
SCA will take full force in 2019 and will be an obligation for online retailers to take across the EU and biometric authentication will become a mandatory component of all online transactions.
Biometric identification offers a variety of advantages when used as a method to confirm the identity of an individual. In the wake of Mastercard’s announcement and SCA, it is already possible to witness its wide-ranging use and significance within the world of eCommerce payments. Furthermore, the introduction of biometrics inside 3D Secure 2 will significantly reduce the risk of fraudulent transactions as well as increase the speed of transactions. In the end, it will increase the security and security of card-not-present online transactions for everyone in society.
Biometrics refers to biological or physical characteristics that can be used to identify individuals, such as fingerprint mapping, facial recognition, and retina scans. These technologies are just a few examples of biometric identification methods available to accurately and efficiently verify a person’s identity.
To prevent CNP fraud, it is essential to verify the validity of the three-digit CVV security codes. Customers should also be educated not to store their CVV codes for added security. However, the main challenge is when fraudsters obtain genuine information, making CNP fraud prevention extremely difficult.
The fraud triangle is a model that helps explain why individuals choose to engage in fraudulent behavior. The three components of the fraud triangle are (1) Opportunity, (2) Incentive, and (3) Rationalization. By understanding these factors, businesses and organizations can take measures to prevent and detect fraud.
Regular updates and announcements are provided through official channels, keeping businesses informed about the latest features and improvements.
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The 3DS Server provides a functional interface between the Directory Server (DS) and the 3DS Requestor Environment flows. 3DS Server is responsible for gathering necessary data elements for 3-D Secure messages, authenticating the DS, validating the DS, the 3DS SDK, and the 3DS Requestor, safeguarding the message contents. The 3DS Server also helps to protect the message content while it is being transferred to DS and vice versa.
