Kiwis still nervous about use of biometric data in digital payments

Facial recognition technology is on the rise. Photo / Getty Images

Using a fingerprint or facial recognition technology to undertake a financial transaction is growing in popularity but concerns remain over privacy and which entities have access to the information.

That was one of the trends to emerge in research undertaken by Mastercard as part of its New Payments Index.

The global study of 40 markets found Kiwis are enthusiastic adopters of digital payment technology with 86 per cent having used digital wallets, QR codes, buy now pay later, cryptocurrency and biometrics in the last year.

But reservations remain about the security of new payment technologies and who is behind it.

Ruth Riviere, country manager New Zealand and Pacific Islands at Mastercard, said the pandemic was a catalyst for unprecedented and rapid uptake of digital payments.

"New Zealand does rank highly in terms of the appetite. We are ahead of the global average in terms of having used at least one digital payment method in the last year."

New Zealand was at 86 per cent whereas globally it was 83 per cent. Although New Zealand was in line with the Asia Pacific region take-up, she said.

"New Zealanders do have that comfort with digital payment methods and ... we expect Kiwis to grow their use of digital payments."

She said 94 per cent were likely to use a method of digital payment in the next year and that was in line with global uptake.

"Kiwis have been using digital payments for a long time. But we have seen the comfort with adopting even newer technologies to be really high when compared to other markets in our research."

But she said there was still reservations around security.

Riviere said security was still the top concern for consumers when they thought about the type of payment method they wanted to use.

"I don't think that is a bad thing. I think it is great that Kiwi consumers are thinking about safety and security when they make a payment and thinking about who they trust."

Biometric identification was seen by 60 per cent of those surveyed as easier than remembering PINs or passwords while 59 per cent said its was more secure than traditional methods of verification.

Ruth Riviere, Country Manager, New Zealand and Pacific Islands at Mastercard. Photo / Supplied

But only 37 per cent felt comfortable sharing their biometric data to save time and 72 per cent were concerned about which entities would have access to the data.

Riviere said biometric data was broadly seen as the easiest and safest way to do transactions but it was still a new technology.

"You only have to look at everyone who is using Apple Pay and we know that is increasing. Every one of those transactions will have had either a fingerprint or a face ID biometric experience related to it. It is a fairly new technology. Like digital payments more broadly we expect Kiwis to continue to adopt it and use it more and more."

Digital currencies

While there was broad awareness of cryptocurrencies and other digital assets the uptake had been gradual with 17 per cent of those surveyed holding a crypto investment over the last year.

That was despite a crash in the cryptocurrency market over the last year.

"Despite the challenges 35 per cent of people are looking for increased flexibility to use crypto in everyday payments. People are still thinking about this space."

Riviere said there was still pessimism - 66 per cent were pessimistic about their monetary value.

"That is quite different to what we are seeing in Asia-Pacific where there is more optimism in this space when it comes to digital assets more broadly."

Buy now pay later

Buy now pay later has grown strongly but New Zealand consumers are still less comfortable using it when compared to consumers in the Asia Pacific region.

She said consumers were looking for a BNPL solution but indicated they would feel safer using one backed by a major payment network or from their current bank account rather than from other providers.

"That is the key takeaway from me around it. That they are looking for these services but perhaps looking elsewhere for them."

Shopping instore

Riviere said contactless payment uptake in New Zealand continued to track ahead of the region.

"What's also quite unique about New Zealand is while digital payments and online payments continue to go well Kiwis do really like the in-store experience too."

The research found 73 per cent of Kiwis survey had made in-person purchases in the last year and only 60 per cent for the Asia-Pacific region.

"Some of that obviously the lockdowns were slightly different in some of those markets. But I think it is broader than that. Kiwis do want that omni-channel experience. They want an online option but they do still enjoy going in-store."

She said that was something New Zealand businesses should consider.