Biometric Payment Market Size, Share & Industry Analysis, By Component (Hardware and Software), By Biometric Mode (Fingerprint Recognition, Facial Recognition, Iris Recognition, and Voice Recognition), By Technology (Contact and Contactless), By Application (BFSI, Retail & E-commerce, Healthcare, Travel & Hospitality, Government, and Others), and Regional Forecast, 2024 – 2032

The global biometric payment market size was valued at USD 8.53 billion in 2023. The market is projected to grow from USD 9.91 billion in 2024 to USD 34.71 billion by 2032, exhibiting a CAGR of 17.0% during the forecast period.

Biometric payments are transactions that use biological characteristics to authenticate a person’s identity before processing financial transactions. This method uses various hardware equipment and software technologies to make payments using unique biological characteristics, such as fingerprint recognition, facial recognition, iris recognition, and voice recognition, instead of traditional methods such as passwords, PINs, or cards. Biometric authentication payments offer higher security compared to traditional methods, reducing the risk of fraud, identity theft, and unauthorized transactions. In addition, governments and regulatory bodies are increasingly supporting the adoption of biometric technologies for secure financial transactions. These factors are slated to play an important role in driving the global market growth during the forecast period.

The COVID-19 pandemic boosted digital transformation efforts across various sectors. During the pandemic, the adoption of contactless payment spurred as consumers were preferring touchless options for hygiene reasons and also to curb the spread of the virus. This type of payments, which often involve contactless authentication such as facial, iris, or voice recognition, fit well with this trend, driving the market growth during the pandemic period.

In the scope of work, we have included solutions offered by companies such as Fujitsu, NEC Corporation, Visa Inc., Thales Group, IDEMIA, Fingerprint Cards AB, Mastercard, and others.

Impact of Generative AI

Growing Demand for Enhanced Security and Fraud Prevention to Boost Market Growth

Generative AI is poised to have a significant impact on this type of payment method, as it is influencing various aspects ranging from security and fraud detection to personalization and user experience. Generative AI can be used to create sophisticated models that simulate various types of biometric spoofing attacks, such as fake fingerprints and deep fake faces. These models help in developing more robust biometric authentication systems capable of detecting and preventing such attacks with greater accuracy. Generative AI algorithms can continuously learn from new data to identify and respond to emerging fraud patterns in real time. This adaptive learning enhances the system’s ability to detect anomalies and prevent fraudulent transactions, improving overall security. Thus, generative AI plays a transformative role in the market by offering enhanced security, improved accuracy, and personalized user experience. These factors are anticipated to fuel the growth of the market during the forecast period.

Biometric Payment Market Trends

Rise in Adoption of Mobile Biometric Payments among Consumers Aid Market Growth

Mobile devices equipped with biometric sensors, such as fingerprint scanners and facial recognition, are becoming the primary medium for biometric payments. Platforms such as Apple Pay, Google Pay, Samsung Pay, Paytm, and PhonePe, which incorporate biometric authentication, are widely adopted across the globe. In smartphone biometric authentication payment methods, fingerprint recognition remains dominant. There is a growing shift toward facial and voice recognition, particularly for smartphone payments. These methods offer a seamless, contactless payment experience, which has gained popularity post-pandemic. As biometric technologies become more mainstream, consumers’ trust and acceptance are increasing. Public awareness campaigns and the successful deployment of biometric systems by major tech companies have helped in building consumer confidence. Thus, as technology continues to evolve and consumer acceptance grows, the market is anticipated to expand significantly, offering secure, convenient, and personalized payment experiences.

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Biometric Payment Market Growth Factors

Growing Adoption of Digital and Contactless Payments Fuels Market Growth

The global shift toward digital payments accelerated by the COVID-19 pandemic has increased the demand for secure and convenient payment methods. In addition, the adoption of biometric authentication payment methods provides a secure alternative to physical cash and cards. The preference for contactless payment methods, due to convenience and health concerns, has driven the adoption of these payment solutions, which often involve touchless authentication processes such as facial recognition or voice verification.

Moreover, consumers are increasingly seeking more convenient and seamless payment methods. Biometric authentication method payments allow for quick, contactless transactions without the need for physical cards or remembering passwords, catering to the growing demand for hassle-free payment experiences. For instance,

• In May 2024, Visa Inc. developed a new biometric authentication payment card product to revolutionize payment cards and address the future needs of merchants, customers, businesses, and financial institutes.

RESTRAINING FACTORS

High Implementation Cost and Privacy and Data Security Concerns May Hinder Market Growth

Implementing biometric payment systems requires significant investment in specialized hardware such as (fingerprint scanners, facial recognition cameras, and others) and software, which can be costly, particularly for Small and Medium-Sized Enterprises (SMEs). In addition, regular maintenance, software updates, and hardware updates are necessary to ensure the security and efficiency of biometric systems, adding to the overall cost.

Moreover, biometric data is highly sensitive, as it involves unique physical characteristics of individuals. A data breach or misuse of this information can lead to serious privacy violations, and unlike passwords, biometric data cannot be changed if compromised. In addition, many consumers are concerned about how their biometric data is collected, stored, and used, which can lead to reluctance in adopting these payment systems. Thus, these factors are expected to hinder the biometric payment market growth.

Biometric Payment Market Segmentation Analysis

By Component Analysis

Rise in Adoption of Biometric Hardware Components to Provide Faster Authentication Experience Propels Segment Growth 

By component, the market is bifurcated into hardware and software.

The hardware segment captured the maximum share of the market in 2023. Hardware-accelerated processing of biometric data results in quicker authentication times, providing a seamless user experience. For instance, a fingerprint sensor with fast processing capabilities can authenticate a payment in just a fraction of a second. Hardware components are typically optimized for consistent performance under various conditions, such as different lighting, temperature, or environmental factors, ensuring that users can reliably authenticate their payments in a wide range of scenarios.

The software segment is anticipated to witness the highest CAGR during the forecast period. Biometric software typically includes advanced encryption methods to protect sensitive biometric data both at rest and in transit. This ensures that even if the data is intercepted, it remains secure and unreadable to unauthorized parties. The software can incorporate sophisticated algorithms to detect and prevent fraud. In addition, it can analyze patterns of biometric data usage to identify anomalies that may indicate fraudulent activity, triggering additional security measures or alerts.

By Biometric Mode Analysis

Increasing Demand for Quick and Seamless Authentication Process Fuels Adoption of Fingerprint Recognition Among Organizations

Based on biometric mode, the market is categorized into fingerprint recognition, facial recognition, iris recognition, and voice recognition.

The fingerprint recognition segment captured the highest market share in 2023. Fingerprint recognition provides a fast and seamless authentication process, typically taking less than a second to verify a user’s identity. This speed is especially beneficial in retail environments where quick transaction processing is crucial. The process of placing a finger on a sensor is simple and intuitive, requiring no special training or knowledge. This ease of use makes fingerprint recognition accessible to a broad range of users, including those who may not be tech-savvy.

The facial recognition segment is anticipated to register the highest CAGR during the forecast period. Facial recognition technology has become increasingly popular in biometric authentication payment systems owing to its convenience, security, and user-friendly nature. Facial recognition allows for contactless and hands-free authentication, which is particularly useful in situations where users need to make payments quickly without physically interacting with a device. This feature is especially valuable in the current health-conscious environment, as it minimizes contact with shared surfaces.

By Technology Analysis

Rise in Demand for High Accuracy and Reliability Propels Adoption of Contact-based Biometric Authentication Payment Systems

Based on technology, the market is divided into contact and contactless.

The contact segment captured the highest market share in 2023. Contact biometric technologies, such as fingerprint or palm recognition, typically involve direct physical contact with a sensor. This close interaction often results in highly accurate readings, minimizing errors and false rejections. Contact-based biometric systems, particularly fingerprint recognition, have been in use for many years and are well-established in various industries. This widespread adoption means that the technology is mature, reliable, and trusted by users and organizations alike.

The contactless segment is anticipated to expand at the highest compound annual growth rate during the forecast period. Contactless technologies can be used in various environments and situations, from mobile devices to large-scale public infrastructure such as airports or stadiums. This versatility makes them suitable for a wide range of applications beyond just payments. In addition, contactless systems can easily scale to accommodate large numbers of users without the need for additional infrastructure. For instance, a facial recognition system can authenticate thousands of users in a short time, making it ideal for events or public transportation.

By Application Analysis

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Increasing Focus on Adoption of Enhanced Security and Fraud Prevention Systems in Retail & E-commerce Boosts Segment Expansion

Based on application, the market is classified into BFSI, retail & e-commerce, healthcare, travel & hospitality, government, and others (transportation).

The retail & e-commerce segment captured the highest market share in 2023, as they are increasingly adopting these payment solutions to enhance security. Biometric data such as fingerprints, facial recognition, or voice recognition provides a unique identifier that is difficult to replicate, significantly reducing the risk of fraudulent transactions. In addition, in the retail sector, speed is crucial. Biometric authentication payment enables faster checkout processes by eliminating the need for customers to enter PINs, passwords, or other credentials. This streamlined experience reduces wait times and improves overall customer satisfaction.

The healthcare segment is poised to observe the highest CAGR during the study period, as biometric authentication payments are being increasingly adopted in healthcare to secure patient information and payments. Biometric authentication ensures that only authorized individuals can access sensitive patient data and financial transactions, which is crucial for compliance with the Health Insurance Portability and Accountability Act (HIPAA) in the U.S.

REGIONAL INSIGHTS

Regionally, the market is segregated into five key regions, namely Europe, South America, North America, the Middle East & Africa, and Asia Pacific.

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North America held the largest biometric payment market share in 2023. The adoption of biometric authentication payment systems in North America has been growing steadily, driven by advancements in technology, increased consumer demand for secure and convenient payment methods, and the efforts of financial institutions and tech companies to integrate biometric authentication into their services. For instance,

• In December 2023, FortressPay, with the help of the Amazon Web Services Independent Software Vendor (AWS ISV) program, launched its biometric payment platform for enterprises in the U.S.

In the region, the U.S. has witnessed a rise in financial fraud and identity theft. Biometric authentication offers a higher level of security compared to traditional methods such as PINs and passwords, making it an attractive option for consumers and financial institutions. Furthermore, major banks and financial institutions in North America, such as Bank of America, Wells Fargo, and Citibank, are increasingly offering biometric authentication options for mobile banking apps and ATM transactions.

Asia Pacific is expected to grow at the highest CAGR during the forecast period. APAC is one of the fastest-growing regions for mobile and digital payments, with China, India, and Japan leading the charge. The widespread use of smartphones and digital wallets has paved the way for biometric payments, particularly fingerprint and facial recognition technologies. The region has a large, young, and tech-savvy population that is quick to adopt new technologies. This demographic is highly receptive to biometric authentication payment methods, which offer speed, convenience, and enhanced security. In China, biometric authentication payments are deeply integrated with popular e-wallets such as Alipay and WeChat Pay, which use facial recognition to authorize payments. This integration has made biometric authentication payments a common feature in online and offline retail transactions. For instance,

• In November 2022, IDEX Biometrics engaged in a partnership with M-Tech Innovations Ltd., a technology provider company. This collaboration aimed to introduce biometric payment cards in India in 2023.

Europe is anticipated to grow at a significant CAGR during the study period. European banks are at the forefront of adopting biometric payment technologies. Many banks have introduced biometric ATMs that allow customers to authenticate themselves using fingerprint or iris recognition, and mobile banking apps increasingly use biometric data for secure login and payment authorization. Biometric authentication is commonly used in conjunction with digital wallets and mobile payment apps across Europe. Apple Pay, Google Pay, and other European mobile wallets frequently utilize fingerprint or facial recognition to authorize payments, ensuring a seamless user experience. Furthermore, European retailers are embracing this type of payment as part of their omnichannel strategies. In stores, biometric authentication payment options such as facial recognition at self-checkout kiosks are becoming more common, while in online modes, biometric authentication is used to streamline the payment process and reduce cart abandonment.

The Middle East & Africa (MEA) is expected to showcase noteworthy growth during the forecast period. The booming e-commerce sector in the region has fueled the demand for secure online payment methods. Biometric authentication is increasingly being used for online transactions to reduce fraud and enhance security across the region.

Moreover, in South America, retailers are increasingly adopting biometric payment systems to enhance the customer experience. For instance, biometric kiosks in stores allow customers to check out quickly using facial recognition, reducing wait times and improving service efficiency.

KEY INDUSTRY PLAYERS

Key Players Are Emphasizing Acquisition Strategies to Maintain Dominance

Key players are focusing on expanding their geographical presence across the globe by presenting industry-specific services. Major players are focusing on strategic mergers and acquisitions with regional players to maintain dominance across regions. Top market participants are launching new solutions to increase their consumer base. An increase in constant R&D investments for product innovations is enhancing market expansion. Hence, top companies are rapidly implementing these strategic initiatives to sustain their competitiveness in the market.

List of Top Biometric Payment Companies:

• Aratek (Taiwan)


• Fujitsu (Japan)


• NEC Corporation (Japan)


• IDEMIA (France)


• Thales (France)


• Fingerprint Cards AB (Sweden)


• Google LLC (Alphabet Inc.) (U.S.)


• Visa, Inc. (U.S.)


• Mastercard (U.S.)


• Aware, Inc. (U.S.)

KEY INDUSTRY DEVELOPMENTS:

• July 2024: Aratek engaged in a partnership with Dialtronics, an India-based company. Through this partnership, Aratek will provide its A600-M optical fingerprint modules to integrate with Dialtronics’ IP phones to develop a reliable communication platform for inmates.


• March 2024: Fingerprint Cards AB entered a partnership with Garanti BBVA and Thales. Through this collaboration, the company launched biometric card payments in Turkey. It can be integrated into Point-of-Sale (POS) systems and existing bank infrastructures without requiring upgrades.


• December 2023: Fingerprint Cards AB developed biometric payment cards with the help of Thales. This solution enables merchants to speed up transactions, offering enhanced security and power efficiency.


• January 2023:  Ingenico and Fujitsu’s subsidiary Fulcrum Biometrics, Inc. collaborated to launch an accurate, secure, and smooth biometric authentication payment solution. This solution is based on palm vein identification, which will help retailers reduce the risks of fraud, speed up check-out, and enhance customer experience.


• October 2022: First Abu Dhabi Bank (FAB) and Majid Al Futtaim (MAF), a UAE-based retailer, engaged in a partnership. With this collaboration, they aim to introduce a novel biometric payment card in the UAE with the help of IDEMIA’s technology.

REPORT COVERAGE

The report provides a detailed analysis of the market and focuses on key aspects such as prominent companies, product/service types, and leading applications of the product. Besides this, it offers insights into the market trends and highlights key industry developments. In addition to the factors above, the report encompasses several factors that have contributed to the growth of the market in recent years.

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Report Scope & Segmentation