Biometric remote mobile payments will total $1.2t by 2027, study shows

FinTechs can innovate rapidly and provide flexibility, while operators can market and distribute their solutions at scale as well as offer specific enablers to ease deployment. Smartphone operators already partner with small, innovative companies to offer differentiated services to their customers, and not just in the area of finance.

The FinTech market size will reach $124.3b by the end of 2025 at a compound annual growth rate (CAGR) of 23.84%. The worldwide smartphone shipment instead is expected to reach $1.53b units by 2025, resulting in a CAGR of 3.6%.

As per IBS intelligence’s Mobile payments report, Corporate partnerships and acquisitions have been common in emerging markets over the past two to three years, as major companies seek to dominate cross-border payments and digital payments. Several large corporate groups in Africa have announced large-scale alliances, acutely aware of the need to combine forces and market bulk to stay ahead of disrupting FinTechs and Neo banks.

The usual associations between telecoms, banks, payment companies, and software companies are not the only types of business partnerships that are emerging: mobile phones and hardware makers are partnering with payment providers and telecom companies to offer consumers and small companies a unique credit product – asset financing – at a low upfront cost that so many companies are eager to provide.

SCA is essential to market growth

The SCA requirement of PSD2 (Second Payment Services Directive) has pushed financial institutions to implement biometric authentication. To meet this requirement, financial institutions have capitalised on smartphone biometric authentication capabilities; accelerating the technology’s adoption. The research found that the volume of biometrically authenticated remote mobile payments will grow by 383% over the next 5 years, reaching 39.5b globally by 2027.

To maintain trust and reduce fraud, financial institutions are implementing step-up authentication, where certain transactions are escalated for biometric approval based on risk scoring. Therefore, vendors must offer multiple ways to authenticate, as well as develop new techniques to keep biometrics secure.

Payments to benefit from facial recognition

The report found that facial recognition is paving the way for greater adoption of biometrics in mobile payments, with OEM-Pay solutions leveraging the near-ubiquity of facial recognition capabilities to provide frictionless checkout experiences for customers. With the use of facial recognition increasing, the technology has become a target for malicious actors using advanced spoofing techniques, such as digital injection attacks. In response, mobile authentication vendors must prioritise the design and implementation of enhanced liveness detection, and anti-spoofing techniques, to combat the ever-evolving role of fraudulent players and ensure that security is not compromised.