LONDON--(BUSINESS WIRE)--Technavio market research analysts forecast the global biometric PoS terminals market to grow at a CAGR of close to 28% during the forecast period, according to their latest report.
The market study covers the present scenario and growth prospects of the global biometric PoS terminals market for 2017-2021. The report also lists facial recognition, fingerprint identification, iris recognition, palm vein identification, retina recognition, and voice recognition as the six major segments based on technology. In 2016, fingerprint identification dominated the market, accounting for a revenue share of 85%.
According to Raghu Raj Singh, a lead analyst at Technavio for computing devices research, “The biometric POS terminals market will grow at a significant pace since the need for secure payment methods has become a necessity with the growing number of fraudulent transactions. Biometric POS terminals provide an extra layer of security since biometrics is extremely difficult to duplicate.”
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Technavio analysts highlight the following three market drivers that are contributing to the growth of the global biometric PoS terminals market:
- Rise in fraud at merchant POS terminals
- Increasing adoption of EMV standards
- Increase in digitalization
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Rise in fraud at merchant POS terminals
The chances of fraud at merchant POS terminals is increasing. Credit and debit card users face issues such as identity theft and financial fraud. Remote hacking of the POS systems by hackers to steal debit and credit card data has resulted in millions of dollars' worth of transactions. The high instances of fraudulent activity have been one of the major reasons for the growth of the biometric POS terminals. Since biometric data is unique to individuals, replicating it would be difficult. Millions of people have been affected by such malware at POS. By using biometric POS, the security of customers is enhanced.
Increasing adoption of EMV standards
The EMV standard was developed to ensure a safe and secure payment transaction between chip-based payment cards and POS terminals. Most debit and credit cards use magnetic tapes to store data. These magnetic tapes can easily be tampered with, leading to insecure monetary transactions and monetary loss for users. Thus, many financial institutions such as Barclays are issuing EMV cards to ensure secure financial transactions. A dynamic code is generated for every transaction when an EMV card is inserted into an EMV POS terminal. This is the primary benefit of EMV cards, as it becomes almost impossible for hackers to decode and retrieve customer information.
However, with the increasing number of EMV cards, EMV POS that supports these cards is also bound to increase. This, in turn, will lead to a need for more secure transactions. With the number of fraudulent transactions on the rise, companies are looking to adopt biometric technologies into their POS terminals. For instance, in 2015, Visa announced new biometric specification for EMV card transactions.
Increase in digitalization
Another driver influencing the growth of the market is digitalization. Digitalization is considered to be the third industrial revolution. In 2016, India devalued 500 and 1,000 denomination currency notes to move toward digitalization of the economy. The essence was that Indian customers need to shift from paper money to cashless transactions. This trend of digitalization has not only been seen in the Indian economy but also in developing nations such as China, Russia, and Denmark. Digitalization is now seen as a driver of a country's growth, its GDP, and quality of life.
Payment technologies have also gone digital, which not only makes them safe and secure but also prone to cyber-attacks. These attacks by hackers can result in losses that amount to millions of dollars to the respective firms. Along with the customers, POS merchants are also hit due to these attacks.
“The use of biometric POS can help in adding an extra layer of security to financial transactions and, therefore, make payments more secure. There is also no need of an OTP or debit or credit card for transactions since the authentication is the person's biometrics,” says Raghu.
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