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Mobile Payment Services Embrace Advanced Security

There are now more than 6.4 billion mobile phones in circulation worldwide. They've evolved far beyond a simple means of two-way communications. They're now a multifaceted enabler of numerous day-to-day online activities made possible by mobile internet access.

Clearly, there are both opportunities and challenges associated with this trend. As people increasingly complete more digital transactions via smartphones and other mobile devices, the need to verify their identity -- and protect it from theft -- becomes paramount.

According to the latest market study by Juniper Research, the increased rollout of contactless payment services using fingerprint scanners will increase the number of biometrically authenticated transactions to nearly 5 billion by 2019 -- that's up from less than 130 million in 2015.

Juniper observed that at present, only two services -- from Apple and Samsung -- used fingerprint scanners for authentication, with availability currently limited to the U.S. and UK for the Apple service, and the U.S. and South Korea for Samsung's offering.

However, Juniper believes that with both services expected to be launched in multiple additional markets during 2016, the convenience of the fingerprint scanner is likely to make it a primary mechanism for transaction authentication.


The market researcher argued that incorporation into additional mobile wallets would be spurred by a greater availability of fingerprint scanners in mid-range smartphones. This progress, together with a growing adoption of contactless infrastructure at point of sale terminals, is likely to drive further adoption in the medium term.

However, the researcher cautioned that biometric data security was very important, citing the case of the HTC One Max -- where fingerprint data was mistakenly stored on the mobile device in plain-text, and in a world-readable location.

"When a password or PIN is hacked, the consumer can simply get a replacement. When biometric data -- i.e. fingerprint, iris, facial -- is stolen, the consumer's online identity could be irretrievably compromised," said Windsor Holden, head of forecasting & consultancy at Juniper Research.

Additionally, with the greater prevalence of global cyber crime -- more than one billion online records were exposed by data breaches in 2014 -- embracing tokenization was becoming an increasingly attractive proposition for companies in the financial services industry.

Juniper says that the tokenization process -- wherein data with no intrinsic value replaces high-value cardholder data -- could reduce exposure to credit and debit card fraud. Furthermore, with hackers merely obtaining tokens which are meaningless in isolation, the scale of cyber attacks on web sites might also decline.

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