Karthik Ramanathan, senior vice president of Cyber and Intelligence (C&I) Solutions, Asia Pacific at Mastercard.

Mastercard on why biometrics is the future of secure payments

Today it’s a finger tap, tomorrow you may only need your face to pay, says Mastercard’s Karthik Ramanathan.

The future of payments and banking is one where your body, or your DNA, is your password – literally. Mastercard has introduced a new card verification technology where customers need only to tap a finger on top of their card to approve a purchase in a payment terminal – meaning, no need to manually punch in a code, not only making the payment process faster but also more secure.

The move is part of the payments giant’s shift away from fraud management and more into risk management, according to Karthik Ramanathan, senior vice president of Cyber and Intelligence (C&I) Solutions, Asia Pacific at Mastercard.

“We are moving away from just managing risk at the point of interaction, to the entire interface that the customer has with the merchant or the issuer,” Ramanathan told Asian Banking and Finance in an exclusive interview during the Singapore Fintech Festival 2023. “Fraud management is very focused on transactions. [Risk management] is when you move away from just the transaction, and look at the entire ecosystem.”

Biometric payment solutions form one part of Mastercard’s overall shift towards risk management. “All these form a layer of protection across the entire ecosystem, and various touch points even before a transaction happens.”

Speaking with Asian Banking & Finance, Ramanathan summarised that the future of payment processes and security is one that requires evolution to keep up with the fraud and risks arising in an increasingly online world.

First evolution: Fraud
Ramanathan said that Mastercard’s exploration into biometrics solutions comes at a time when the pace of risk of fraud has increased.

“The scale of what can happen in the online world has increased. What used to be, for example, a fraud of a physical plastic — in today’s world, it has become about stolen credentials. This can be used globally [and] it can be used online in milliseconds, without the need for somebody to clone a card,” Ramanathan noted, when asked on the biggest shift that is happening in the world of credit card fraud.

What’s more alarming is the rise of cyberattacks, and the fact that a customer’s stolen credentials may be leaked into the dark web and used to orchestrate fraud at a larger scale. 

All these prompted Mastercard to also evolve the way they secure data — and they found that the right way is to move from simply fraud management to overall risk management.

“What we’re trying to do is to make sure that the entire ecosystem is now cyber-ready and cybersecure,” Ramanathan said.

“We started looking at tools that allow us to look at the entire ecosystem in real-time, to see if there are cyber vulnerabilities so that we can alert all the recipients to say you need to fix certain issues,” he added.

Recently, Mastercard acquired a company that allows third-party and partner risk management in real-time. This service — which produces an actionable report on how a company can enhance its cyber posture — is not just available within Mastercard, but also offered to any company within Mastercard’s partner and vendor ecosystem.

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Second evolution: Behaviour
Ramanathan said that in the future, customers may no longer need to provide their fingerprints anymore: all you will need is your face.

“What we are now trying to do is use the power of biometrics to create an ecosystem where somebody can make a physical install payment, without any need for devices or payment credentials or anything at all. It’s just literally you and your face. And you can walk out with a purchase,” he said.

But even physical biometric solutions are just a stepping stone to the next frontier of how Mastercard sees itself protecting customers from risk and doing business. That next level is behavioural biometrics.

This involves detecting risk and possible fraud through the patterns of your behaviour. “The way you hold your phone, the way you make keystrokes, the number of errors you make, the way you corrected, the speed, all that is very specific to who you are,” Ramanathan noted, adding that Mastercard sees a huge area of opportunity in behavioural biometrics, at least online.

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Third evolution: Co-existence
For a payment network giant whose primary mode of business is in the cards payment industry, wouldn’t such a future — which no longer necessitates the use of physical items to pay — be counterproductive?

Not at all, according to Ramanathan, who noted that there will be no “one-size-fits-all” solution for all customers. Practically, there will be no extinctions — only co-existence.

“There is no one-size-fits-all [solution]. We’re looking at where the customer journey is. If the customer journey demands, say, that it needs to be a digital form of payment, [then] it’s going to be a digital form of payment,” Ramanathan assured.

 “We almost see all of these different payment types coexisting, where retailers are going to be adopting each of these specific types of payments, based on what customers are demanding at that point of interaction,” he said.

Instead of replacement, Mastercard intends to have all solutions ready to accommodate the needs of their customers in all stages of their payment lifecycle.

“I think the right way to look at it is, we evolve with a customer’s life rather than the other way around of trying to force them to make payments in a particular way,” Ramanathan said.

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