Dear Reader,
This article was originally published in the SCCG Management Weekly Newsletter #13 on November 5, 2020.
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Starting with the basics, biometric payments use a part of you — your body — as a means for identifying who you are and your association with a digital payment method, in order to complete a transaction. Some better known biometric identification methods are fingerprint identification, such as the well known Touch ID for Apple iPhones, and their use of front-facing cell phone cameras to identify owner’s faces, using Face ID.
One of the most famous, but least implemented methods of biometric identification are from the movie industry, with science fiction and action films such as Star Trek, Blade Runner, Mission Impossible II, and Minority Report (shown below) all using the unique pattern of capillary vessels and tissues in the retina of the eye, to allow characters to access secure systems and locations.
In addition to these widely understood biometric technologies involving fingerprints, face recognition and retina scanning, most of us have some level of experience with voice recognition through Apple (“Hey Siri”), Google (“OK, Google”) and Amazon (“Hey Alexa”). The next step there is voice identification, where systems can uniquely recognize you from your voice.
Why is all this important?
Because firms like Juniper Research are projecting “Remote payments to account for 57% of all biometric transactions by 2023”. Now, this would be much more exciting if the projection was, “57% of all remote payments will occur through biometric transactions”, but we will take what we can get.
The Easy Button
At checkout counters across the US, we’ve grown accustomed to seeing contactless payment devices supporting Apple Pay, Google Pay and Samsung Pay. When it comes time to check out, you just unlock your phone (with your face, fingerprint or PIN code), trigger your mobile payment system and hover your phone over a cool blue glowing antenna or smudged beige plastic surface, depending on the hardware, and hopefully, everything works as expected. Most of us who have used contactless payments on our phone at point of sale systems have been sabotaged by faulty hardware or user error, resulting in a slightly embarrassing transaction failure that the cashier has to reset so you can try again.
Observation #1
I remember a story of a friend (certainly not me), who tried to pay for groceries with Apple Pay, using their Apple Watch, and after the transaction failed twice, heard an older gentleman in line behind him shout, “Hey! Future boy! Use a card!”
So yeah, there’s that.
Observation #2
This OTHER friend (again, certainly not me) who is also a strong Apple early adopter and always has the latest iPhone, revels as biometrics improve each year. It started with the very well received Touch ID, which continued to improve on its existing technology to the point that Touch ID was so fast and accurate, most people didn’t even realize they were unlocking their phone with their thumb. It was nearly instantaneous and practically never failed.
Then, Apple released Face ID, and while it worked well, it often didn’t work as fast or reliably as the more seasoned legacy Touch ID technology. Over time, of course, Face ID improved like Touch ID and like magic, our phones would unlock quickly and easily, and added other smart touches like not displaying texts or notifications on the phone unless we were actively looking at the phone. Elegant and useful.
Then came the COVID-19 Pandemic, and we find that our phones do not have Superman’s X-Ray vision, and won’t unlock when we are masked. Furthermore, there’s no more Touch ID, so we are back to using PIN codes to unlock our phones. In response, to be fair, Apple is now integrating Touch ID back into their iPads on the top switch, and hardware manufacturers who didn’t migrate away from touch identification are reveling in their fake prescience.
What Do These Observations Mean for Us?
#1: To change our behavior, a new process has to be easier and more reliable than our old way of doing it. If it ain’t broke, don’t fix it.
Biometric or other forms of contactless remote payment aren’t going to blossom until they work as fast and reliably as a card and a PIN. I never want to get called “Future Boy” in the grocery store again, because I’m trying to show off how tech savvy I am. I mean, my FRIEND is.
#2: We have to want to do the process we’re migrating to. Creating a fantastic solution for a problem or need that doesn’t exist is both ubiquitous and stupid.
We mentioned the big three of mobile payment systems earlier, right? Apple Pay, Google Pay and Samsung Pay? Do you know what the largest mobile payment system platform is? The Starbucks App.
What?? I am not a fan of the Starbucks App.
First, it’s standalone. I can’t pay for anything with it, except Starbucks. It breaks Alton Brown’s rule of kitchen appliances — never buy a kitchen tool that only does one thing.
Second, it’s driven by gift cards associated with your app, which you fill up from a credit card whose information you store to keep that Starbucks gift card topped up, so, Starbucks gets the constant float of impressed cash I credited. A study in 2018 by eMarketer indicated that more than 23 million customers in the US used the Starbucks App’s pre-loaded payment system. Compare that to Apple Pay at 22M, Google Pay at 11M and Samsung Pay at 9.9M.
And yet, you can’t argue with reality. Well, no, of course you can, and we do all the time, but it shows us that of the two key factors, ease and reliability (Starbucks App) and attachment to a process we want (Starbucks Coffee), process attachment wins by a landslide.
So, in conclusion, as the gaming industry pushes forward towards remote / contactless digital payment systems, we have to remember what makes a solution actually get wide adoption, and not get dazzled by technology for the sake of technology. Okay, Future Boy?
