As the average Dane waits in line to pay for her lunchtime latte and BLT, chances are her debit card will not even touch the terminal. Instead, the contactless functionality of Dankort, which is the national debit card in Denmark, allows consumers to 'tap and go' within mere seconds. With the exponential growth in contactless transactions in 2016, the contactless Dankort has paved the way for the Dankort wallet and app launched in the spring, making the piece of plastic potentially superfluous as more and more merchants will have upgraded their terminals to accept contactless and mobile payments.
But the race towards an even smoother payment experience at point-of-sale continues. Lately, Copenhagen-based Nets has teamed up with Japanese Hitachi to co-develop a proof of concept that will allow consumers to authenticate themselves by inserting their finger into a finger vein scanner and thus authorise a transaction.
Merchants and consumers to benefit
Biometrics has the potential to speed up the authentication procedure considerably:
"Using your body as means of identification will greatly improve the user experience. It will get customers faster through the point of sale, and even if they've left their wallet or phone at home, they will be able to pay for their groceries by finger," says Jan C. Plenge, SVP Digital Innovation at Nets.
Nets' collaboration with Hitachi ties in with the Nordic digital payment provider's strategic focus on innovation and co-development with partners and customers. Jan C. Plenge seems at ease with integrating the company's latest commercial launch with Hitachi's finger vein-scanning technology, initially in a lab environment:
"It's not bleeding edge technology which is an advantage. It's technology that we trust and innovation in which we don't experiment with infrastructures that have a societal impact. By co-developing with Hitachi, we merge two existing technologies – the Dankort app and the finger vein scanner – into a proof of concept that could potentially benefit both our merchant customers and consumers by making the payment experience even smoother, faster and more secure," Plenge says, underlining how working with a proof of concept on a trial-and-error basis allows Nets to find the best solution for consumers, banks and merchants:
"Unless we try, we shall never know if there actually is a use case for giving consumers a supplementary version of their debit card that allows them to pay with their finger."
Biometrics will ease the payment experience at points-of-sale
When launching the beta-version of the mobile Dankort in spring 2017 in collaboration with Danish banks and the retail sector, Nets invited consumers and tech-heads to join the Dankort Idea Lab to co-create the Dankort app 1.0 which allows consumers to pay with a locked screen. The final app was released just before the summer:
"Retailers want a Dankort app that future-proofs Dankort as the preferred in-store means of payment for Danish consumers," explains Jeppe Juel-Andersen, SVP and Head of Dankort at Nets, underlining that Nets' vision is to make mobile payments as fast and convenient as contactless payments. If that means combining the state-of-the-art Dankort app technology with biometrics at some point in the future, then why not …
Thus, while busy rolling out the Dankort app and the Dankort for Androids, management at Nets' Dankort team also find time to present their retail customers with a future solution that could make transactions both swifter and more secure:
"It's very early days yet, but a proof of concept is an excellent tool for starting a dialogue with our merchant customers on how they see consumers wanting to pay in their stores going forward. There's a lot of potential in using the body as means of identification, and it's interesting to see that not least senior consumers seem favourably disposed towards using a biometric solution such as a finger vein scan," concludes Jeppe Juel-Andersen, adding that part of the explanation could be that millennials would never leave their house without their smart phone which is literally perceived as an extension of their body.
Finger vein-scanning a proven technology in Japan
While the technology behind finger vein-scanning is quite new in Europe, it has shown solid traction in Japan. Due to high levels of ATM fraud in the 90'ies, the Japanese government asked Hitachi to develop a technology that would reduce card fraud levels, and four years of R&D led the company to conclude that by doing away with the piece of plastic, fraud would be next to impossible:
"A finger print or even a face can be stolen and used for scam purposes. But each of us has a unique vein pattern which can be used as a highly secure means of authentication. Our technology simplifies the vein pattern and turns it into a code which will then be combined with Nets' technology," explains Tom Christensen, Chief Technology Officer, Hitachi Data Systems.
Finger vein authentication uses leading-edge light transmission technology developed by Hitachi to undergo pattern-matching and authentication. Near-infrared light is transmitted through the finger and partially absorbed by haemoglobin in the veins to capture a unique finger vein pattern profile, which is then matched with a pre-registered profile to verify individual identity.
In a happy match between Japanese and Nordic high-tech, Nets then creates a finger vein token which is stored along with the vein pattern. This is used for replacing a vein pattern with a unique key, which again is used for tracing the token representing a virtualised Dankort. A technology not unlike Nets' tokenisation technology that enables contactless and mobile payments.
No two vein patterns are alike which means that fraud levels are very low for finger vein-scanning, making the technology relevant for both low and high-value transactions. To counter fraud even better, Tom Christensen suggests to use two fingers when enrolling the Dankort in the scan solution – one finger to represent your card, and a second finger as a password in order to establish two-factor authentication.
Live demo at stand D26 during Money20/20 Copenhagen
With an aim to ensure faster time to market, Nets introduced Digital Innovation in 2016, consisting of the Digital Lab along with two teams working with user experience and engineering. The Digital Lab prototypes and builds proofs of concept in transformative and emerging technologies such as IoT, AI, biometrics, blockchain, robotics, Virtual Reality and more, in close dialogue with end-users, customers and fintech start-ups. The lab environment allows Nets to try out new ideas that go beyond the scope of daily tasks in the organisation.
Digital Lab team members will be present throughout Money20/20 in Copenhagen on 26-28 June to demo and explain the functionality of the Pay by Finger proof of concept co-developed by Hitachi and Nets.