Millennials ‘driving demand for AI and biometrics’
Written by Chris Lemmon
UK Millennials are driving the demand for artificial intelligence (AI) and biometric authentication when making payments through their smartphones, preferring these methods over traditional passwords and PINs, a new report from Vocalink has found.
The 2017 State of Pay report found that 77 per cent of Millennials thought that new AI technologies, such as virtual assistants and hands-free speakers, were appealing as payment devices. In addition, 28 per cent of Millennials have used fingerprint technologies to verify payments and 35 per cent believe that fingerprint technology is the most secure method of verification, followed by iris scanning (22 per cent).
Overall, a third of the 2,000 UK consumers surveyed believe that fingerprint technology is more secure than a PIN code. The use of fingerprint technology has risen dramatically, from five per cent in 2015 to 22 per cent in 2017 – a trend that the research attributed to the increase in smartphone ownership. A further eight per cent of respondents had also used facial recognition to make payments.
The report also found that the use of smartphones to make payments is now becoming ‘everyday behaviour’, following an increase in confidence around the use of biometrics. Some 52 per cent of respondents now use a mobile banking app on their smartphone, compared with 38 per cent in 2015, while there has also been a growth in peer-to-peer smartphone payments, from nine per cent in 2013 to 52 per cent in 2017.
Consumers are citing convenience, speed and time-saving as some of the main reasons for choosing to pay by smartphone, with half of all consumers now using their phone to transact and pay bills, taxis, friends and family and buy larger expenses such as airline tickets or electronics.
Security remains the top concern for consumers who do not use their smartphone to complete payments. Three in 10 smartphone users without a banking app said they would not adopt mobile banking as it is not secure, while 48 per cent said they are concerned about phone loss – up from 28 per cent in 2015.
Paul Stoddart, CEO at Vocalink, commented: “What’s clear is that while the payments industry has tackled some of the hurdles for consumers, such as convenience and choice in payments, people are increasingly looking for trusted partners to provide reliable and secure payment methods.
“While Millennials are embracing new technologies, the sector still needs to work together to reassure the broader population that new measures such as biometrics and developments in AI payment solutions are providing sophisticated and robust security, allowing them to transact safely and with confidence. Once we have tackled these concerns, the rise of digital payments will only increase.”