Good-bye Swiping, Hello Biometrics
If you pay for everything with plastic or a mobile app when you're on vacation, get ready for the next big innovation. For a look at the future of on-the-go purchasing, we turned to Carolyn Balfany, Senior V.P. and Group Head of U.S. Product Delivery for MasterCard Worldwide.
About.com Family Vacations: It's been said that payment methods will change more in the next five years than in the previous half-century. What are the biggest and most exciting innovations coming and what will the timeline look like?
Carolyn Balfany: The future of payments is not about choosing a card or a smartphone. The future of payments is about having all options available and consumers deciding which ones they like best—and changing their minds every time they pay for something.
There will be many innovations coming in the next five years—mobile phone payments are here and gaining momentum, digital wallet products are popular online and moving in stores, and biometrics are now in pilot programs in the U.S..
Owners of newer iPhone models can now pay for goods at major retailers, safely and securely through Apple Pay. The core of Apple Pay is safety and security. When you add a credit or debit card to Apple Pay, your card numbers are not stored on the iPhone nor on Apple servers. Instead, a unique device account number is assigned, encrypted and securely stored in the Secure Element on your device. Each transaction is authorized with a one-time unique security code.
In addition to Apple Pay, Samsung rolled out their own mobile payment, Samsung Pay, continuing the momentum. Like Apple Pay, each transaction made on newer Galaxy S and S Edge models is authorized with a one-time unique security code. These two platforms compliment MasterCard’s own digital wallet product, MasterPass, which enables consumers to pay with any enrolled payment card, anywhere online or in app, using any device and eliminates the time-consuming need to enter detailed payment and shipping information with every purchase.
While mobile payments are the new big thing, one of many exciting innovations coming is the use of biometrics. Biometrics can help combat counterfeit and lost/stolen card fraud as the combinations of voice and/or facial recognition with fingermarks prove the identity of the cardholder. To bring biometric authentication to the mainstream, MasterCard is participating in a number of pilot programs around the world.
Why Paying with Plastic Will Soon Be Safer
About.com Family Vacations: The U.S. will finally move toward chip-card standard later this year, which is said to be a giant step toward a counterfeit and fraud-free future. Will consumers visibly see any changes or will this be an entirely behind-the-scenes transition?
Carolyn Balfany: The migration to chip cards in the US is indeed a major milestone. Chip cards are credit or debit cards that have computer chips embedded on the card face, so consumers can visibly see that they are active participants in this shift. Chip cards enable safer, smarter and more secure transactions regardless if shoppers pay by card, contactless, mobile or remote payment channels. Rather than swiping magnetic stripes, chip cards are inserted into payment terminals. The terminals instruct shoppers to enter four-digit PIN numbers (chip-and-PIN) or sign their names (chip-and-signature). Online, the payment process remains the same—simply manually enter the card numbers to make purchases.
Which is Safer: Credit Cards or Debit Cards?
About.com Family Vacations: Many people use debit cards, credit cards or a mix of the two to finance their vacations. From a security standpoint, which type of cards provide the most peace of mind and why?
Carolyn Balfany: A key differentiator with MasterCard that's definitely worth noting is that MasterCard protects debit and credit transactions equally, providing valuable security benefits, like Zero Liability Protection, to help keep cardholders safe. For MasterCard cardholders, zero liability applies to their purchases made in the store, over the telephone, online, or via a mobile device. Cardholders are never responsible for unauthorized transactions if reasonable care was used in protecting the card from loss or theft; and the lost/stolen card was promptly reported.
Is Public Wifi Safe for Making Purchases?
About.com Family Vacations: When we travel, we often find ourselves logging into free wifi hotspots in public places such as airports, hotels and cafes. How safe is it to make a purchase with your credit card in those settings and are there any precautions travelers should use?
Carolyn Balfany: Travelers should use their best judgment when on the road. If you absolutely need to make a purchase or book a hotel, do so knowing that Zero Liability will protect you from unauthorized purchases if your account is compromised. Hold off on making the purchase if an area seems unsafe or if someone else in the general vicinity seems a little too interested in what you are doing.