In honor of World Password Day, May 2, I wanted to get to the heart of why we still use passwords. I personally have hit an age where my password systems and memory fail me, like all the time. With all the fancy tech we have developed, why can’t we just make ID, authentication and security so much smoother? Passwords are last generation technology.
My guest on the show today is Margaret Reid, Visa’s svp of risk for North America. She definitely imagines a world without passwords. It’s her job to make sure people are who they say they are and transactions legitimate. Margaret believes the payment industry can move away from passwords in the next five years.
Passwords are old school
We’ve all been burdened with having to use passwords because there haven’t been other really good options. It wasn’t just in payments, either. We’ve been dependent on the password as a means to secure the transaction. Going forward, there are now new technologies available at scale which will allow us to replace a password in many situations.
Tech that will replace passwords
One of the most promising and most adopted is physical biometrics. Fingerprint sensors, facial recognition — those types of biometric technologies. As people get used to these technologies on their mobile phones, we’re more familiar and comfortable with biometrics. We see these as widely adopted now for confirming identity for payment transactions.
We’ve done various studies over the years to understand how comfortable consumers are with these technologies. In a study Visa did in 2017, 86 percent are interested in using biometrics to verify their identity or make payments. 65 percent are already familiar with biometrics. This seems to be really moving ahead now.
Progress on a world without passwords
We seen a number of our client banks running pilots with cards with physical biometric sensors. We also see people broadly adopting in the ecommerce space, online banking, and authentication during a payment transaction.
At Visa, we believe there is no single solution for any fraud problem and we’re always looking for new approaches. With behavioral biometrics — looking at how people are engaging with a process or technology and using that to confirm their identity — we’ve been looking at device-level information to help with our decisioning.
How do you keep the Visa ecosystem safe?
We need to make sure that payments are safe for all participants. For consumers, they need to be confident that their transactions are secure and that they’re not subject to fraud or attacks. From a merchant perspective, if they follow the rules of the Visa payment system, we ensure they’ll get paid each and every time. We have to minimize disruptions that happen in the payments environment.
All transactions flow through our system, VisaNet. As they do, risk and fraud management systems monitor each transaction. We check for various activities on a transaction, monitoring up to 500 different data elements. We give each transaction a risk score that we pass over to the card issuing bank. The bank makes a decision to approve the transaction alongside other checks they do.
The future of financial services
We’re only at the beginning of seeing how financial services are revolutionized by today’s technologies. It’s more than taking what we’ve been used to in a physical world and making them digital, electronifying them. It’s about rethinking the way financial services can be delivered to consumers.
I think we’re already seeing some of those indications. We see how merchants are embedding payments into their products, making it seamless and painless for users to complete a transaction using their payment credentials. We’re seeing a lot of changes in the way banking services are delivered with traditional payments and how people are pushing money to others — like businesses paying workers or people splitting payment for dinner. I think we’ll start to see a lot of different banking services revolutionized over the next couple of years.