# The key trends in payment authentication
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2021-10-12
Category: BUSINESS
Category URL: https://financedigest.com/category/business
Meta Title: Enhancing Payment Security with Biometrics and EMV® 3DS
Meta Description: Learn how biometrics and EMV 3DS technologies are revolutionizing payment security, providing a seamless and secure checkout experience for consumers.
URL: https://financedigest.com/the-key-trends-in-payment-authenticationhtml

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_By **Stephanie El Rhomri,** VP Testing Services, Fime_

Across both in-person and online payments, consumer demands have significantly increased. Easy, interconnected payment solutions are now expected, leaving merchants constantly looking for ways to provide a seamless checkout experience and increase revenues. One difficulty that merchants face is that cart abandonment is extremely high, with over [two thirds of purchases](https://baymard.com/lists/cart-abandonment-rate) cancelled before checkout. Some of these purchases are not completed due to frustration caused by the long or [complex checkout process](https://www.financedigest.com/board-report-highlights-complex-decision-making-process-across-banking-and-finance-sector.html "Board Report Highlights Complex Decision-Making Process Across Banking and Finance sector").

What’s more, merchants need to adapt to changing consumer needs, which have altered dramatically over the course of the pandemic. The volume of e-commerce transactions [increased by 33.6%](https://www.the-future-of-commerce.com/2021/08/03/post-pandemic-e-commerce/) over the course of 2020, and this trend looks set to outlast the pandemic. However, where money goes, fraudsters follow, with instances of fraud increasing [by a fifth](https://www.juniperresearch.com/researchstore/fintech-payments/online-payment-fraud-research-report?utm_campaign=pr1_onlinepaymentfraud_financial_fintech_apr21&utm_source=businesswire&utm_medium=pr) over the past year. This highlights that merchants [need to balance security](https://www.financedigest.com/what-banks-need-to-do-right-now-to-improve-their-digital-services-without-sacrificing-security.html "What Banks Need to Do Right Now to Improve Their Digital Services Without Sacrificing Security ") with convenience to ensure that transactions are safe and easy to make both in-store and online.

**Biometrics – you are your password**

One authentication method that continues to grow is biometrics. A user’s face, iris, fingerprint or even voice can be used to authenticate a payment. Users have [become more familiar with this technology in recent years](https://www.financedigest.com/2022-the-year-future-payment-trends-become-reality.html "2022 – the year ‘future payment trends’ become reality?"), as it has overtaken PIN authentication to secure access to mobile devices. We are now seeing this [success transfer to payment](https://www.financedigest.com/banking-on-the-future-why-payments-transformation-is-the-key-to-success.html "Banking on the Future: Why Payments Transformation is the Key to Success") authentication.

One example of its success is the huge increase in the use of mobile wallets such as Google Pay and [Apple](https://www.financedigest.com/supporting-apple-pay-integration-in-japan.html "Supporting Apple Pay Integration in Japan") Pay. This technology allows consumers to use their face or fingerprint to authenticate a payment on their [mobile](https://www.financedigest.com/what-is-the-optimum-mobile-payment-mix.html "What is the optimum mobile payment mix?") device for an in-store or remote payment. When using this [payment method](https://www.financedigest.com/freelancer-payments-methods-what-you-should-know.html "Freelancer Payments Methods: What You Should Know") in store, users can ‘tap into’ both the hygiene and convenience benefits of contactless while feeling confident about the security of their transaction.

Another use case that combines the ease of contactless with the security of [biometrics is payment](https://www.financedigest.com/the-future-of-biometrics-in-payments.html "The Future of Biometrics in Payments") cards with fingerprint sensors. These [cards allow consumers to tap and pay without having to worry about contactless spending](https://www.financedigest.com/should-we-be-more-cautious-about-contactless-1-in-4-young-adults-with-contactless-cards-say-theyve-increased-their-spending.html "Should we be more cautious about contactless? 1 in 4 young adults with contactless cards say they’ve increased their spending") limits. The security of these cards far exceeds that of traditional contactless cards, while also having the potential to be linked to loyalty schemes, [increasing the likelihood of repeat purchases](https://www.financedigest.com/how-to-increase-repeat-purchase-rates-in-ecommerce.html "How to increase repeat purchase rates in eCommerce"). With the significant growth of [contactless payments in recent years](https://www.financedigest.com/10-years-of-contactless.html "10 years of contactless") leading to even more banks trialing this technology, we can expect to see an increased uptake of this.

**EMV® 3DS – Secure and seamless**

EMV®\* [3-D Secure](https://www.financedigest.com/emvco-and-pci-ssc-combine-expertise-on-3-d-secure-2-0.html "EMVCo and PCI SSC Combine Expertise on 3-D Secure 2.0") (EMV 3DS) is another technology that is gaining traction globally. It takes the form of a messaging protocol, which is used to [identify and verify cardholders for card-not-present transactions with data](https://www.financedigest.com/new-gleif-challenge-facility-extends-ability-to-trigger-updates-of-legal-entity-identifier-data-to-all-interested-parties.html "New GLEIF Challenge Facility Extends Ability to Trigger Updates of Legal Entity Identifier Data to All Interested Parties").

To confirm that the consumer making the purchase is the actual cardholder, the merchant sends data about the transaction, [payment method and device](https://www.financedigest.com/emvco-streamlines-approval-process-for-mobile-payment-devices.html "EMVCo Streamlines Approval Process for Mobile Payment Devices") information to the issuer. The issuer then reviews the data, performs the type of authentication needed and processes the transaction.

This process results in increased transaction approval rates, [reduced fraud](https://www.financedigest.com/how-can-you-reduce-the-risk-of-fraud-in-b2b-payments.html "How can you reduce the risk of fraud in B2B payments?") and a better user experience. Globally, EMV 3DS transactions have grown by [79% over the past 18 months](https://outseer.com/press-release/outseer-protects-100-billion-in-payment-transactions/). And, with the specification constantly being updated to [meet evolving industry requirements](https://www.financedigest.com/lack-of-collaboration-and-skills-shortage-is-limiting-organisations-ability-to-meet-ifrs-9-requirements.html "Lack of collaboration and skills shortage is limiting organisations’ ability to meet IFRS 9 requirements"), we can expect that adoption to continue. For example, [EMVCo recently released guidelines on the EMV](https://www.financedigest.com/emvco-launches-emv-3-d-secure-2-0-specification.html "EMVCo Launches EMV 3-D Secure 2.0 Specification") 3DS user interface (UI) and user experience (UX) design to help card issuers, merchants and solution providers to take a consistent, familiar and efficient approach. This instils [consumer trust in the authentication](https://www.financedigest.com/consumers-in-the-covid-era-can-learn-to-embrace-strong-customer-authentication.html "Consumers in the COVID era can learn to embrace strong customer authentication") process and optimizes the checkout experience. EMVCo has also recently published the [EMV 3DS Payment](https://www.financedigest.com/payment-community-engagement-in-the-development-of-the-emv-specifications-increases.html "Payment Community Engagement in the Development of the EMV Specifications Increases") Token Message Extension. This assists card issuers and merchants in improving the authentication [experience for online shoppers when EMV Payment](https://www.financedigest.com/curating-a-fully-contactless-customer-experience-for-payments.html "Curating A Fully Contactless Customer Experience for Payments ") Tokens are in use, further enhancing the fraud-prevention benefits that EMV 3DS provides.

**A** [changing landscape](https://www.financedigest.com/how-will-ios-14-change-the-digital-landscape.html "How will iOS 14 change the Digital Landscape?")

This growth of both EMV 3DS and biometric authentication can be attributed to more than just the requirement for secure and seamless shopping experiences throughout the pandemic. Regulation also plays a part. [Payments stakeholders in Europe must now ensure that they are compliant with Strong](https://www.financedigest.com/the-late-payments-toolkit-how-to-keep-the-cash-flow-strong.html "THE LATE PAYMENTS TOOLKIT – HOW TO KEEP THE CASH-FLOW STRONG") Customer Authentication (SCA) as part of the European Union’s Payment Services Directive 2 (PSD2). SCA is a mandate that requires payments authentications to use two or more elements of the following:

- Knowledge – something the user knows (e.g., a password).
- Possession – something the user has (e.g., a smartphone).
- Inherence – something the user is (e.g., a biometric authenticator such as a fingerprint).

[Payments that don’t meet](https://www.financedigest.com/stay-ahead-of-the-curve-and-meet-your-customers-payments-needs.html "STAY AHEAD OF THE CURVE AND MEET YOUR CUSTOMERS PAYMENTS NEEDS") these requirements will be rejected, meaning that stakeholders must build additional layers of authentication into their checkout flows. But with specifications to adhere to, regulations to navigate and technical complexities to consider, it can be hard to know where to start.

It is also worth noting that no authentication technology itself is a ‘silver bullet’. There are multiple considerations to be made to ensure that an effective online transaction risk assessment process is in place. A consultant with a broader view of the [payments ecosystem](https://www.financedigest.com/the-future-of-payments-biometrics-within-the-financial-ecosystem.html "The Future of Payments: Biometrics Within the Financial Ecosystem") can ensure the bigger picture is taken into account from the start of projects.

Fime’s long history supporting the industry’s [digital transformation](https://www.financedigest.com/future-of-finance-2023-digital-transformation.html "Future of Finance 2023: Digital Transformation") and long-standing participation in technical associations such as EMVCo, FIDO Alliance and W3C enable us to deliver unrivalled expert support for your projects.


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