South Korean credit card issuers, banks and smartphone manufacturers are planning biometric payment options after the Financial Services Commission, the country s top financial regulator, approved the technology earlier this year. BC Card, a leading credit card issuer, plans to become the the first local financial institution to launch a biometric recognition and settlement service next month, using a fingerprint recognition system.
“The biometric authentication technologies have developed to a certain level, so that now it can be applied to the financial payment system,” said Lee Moo-yeon, who is in charge of the fintech technology team at BC Card, told the newspaper. “We ve secured high accuracy, or match rate, using a fingerprint scanning tech in this finance field.”
While Samsung Card, Samsung Group s credit card unit, will launch the group s flagship mobile payment tool, Samsung Pay, in September, with a built-in fingerprint verification system, Shinhan Bank, the country s No. 2 lender, is preparing to introduce a vein pattern recognition system, while the state-run Industrial Bank of Korea (IBK) is focusing on iris technology.
“We plan to use the iris recognition technology as a non-face-to-face tool that certifies our customers,” said Son Chul-kyu from the IBK. “We have regular meetings with its developer and exchange many ideas to utilize the technology for identification.”
Addressing privacy concerns, BC Card noted the company itself does not store the biometric data, but the users devices do. “Under our biometric identification and settlement system, the individual biometric data is stored in the device, not in a company server,” said the fintech technology team at BC Card. “The smartphone checks the fingerprint, or facial information later, and sends the code to the card firm if it matches. Then, we approve the payment.”
In April, South Korea s central bank revealed plans to develop standards for biometric identification that is used to authenticate digital transactions, according to a new report by the bank.
In a document on the increasing popularity of e-payments, the Bank of Korea revealed that the Committee on Financial Informatization Promotion (CFIP) will develop the technical standards before the end of the first half of this year, and then test such services in the latter half with domestic commercial banks.
In January, the Financial Services Commission and the Financial Supervisory Service announced measures that aim to support the convergence of IT with banking industries – introducing and expanding financial technology (fintech). The nation s two financial regulators are also planning to cut the size of minimum capital requirements – for firms that want to run e-banking businesses, set up digital currency companies and facilitate digital money transfers – by more than 50 percent in the mid to long term.