Biometric Payment Market Expected to Reach $37.4 Billion by 2033

According to a new report published by Allied Market Research, titled, “Biometric Payment Market, By Type (Contact-Based, Contactless, and Hybrid), Biometric Mode (Fingerprint Recognition, Facial Recognition, Voice Recognition, Iris Scans, and Others), and Application (BFSI, Retail and E-commerce, Healthcare, Transportation, Government, and Others): Global Opportunity Analysis and Industry Forecast, 2024-2033". The biometric payment market was valued at $8.4 billion in 2023, and is estimated to reach $37.4 billion by 2033, growing at a CAGR of 16.3% from 2024 to 2033.

Compared to conventional methods such as PINs or passwords, biometric authentication gives a higher level of security. Due to the near impossibility of copying or stealing biometric features, there is a lower chance of identity theft or unauthorized access to sensitive payment information. This greatly improves transaction security and aids in preventing fraud, hence fueling the biometric payment market growth.

To increasingly embrace biometrics for authentication, major players in the biometric payment market are adopting different key strategies such as partnerships and product launches to offer a comprehensive solution that enables merchants to adopt modern payment solutions. For instance, in December 2023, FortressPay launched an enterprise-ready biometric payment platform. With its new Payment Identity platform, FortressPay aims to provide a frictionless customer experience while eliminating payment fraud. With mobile device payments accounting for over 65% of all credit card transactions globally, there is a need for a secure and convenient payment solution. By integrating its global issuing and acquiring capabilities with a biometric checkout experience, FortressPay aims to provide merchants with a seamless payment process while reducing chargebacks to nearly zero.

Technological progress in biometric authentication methods such as fingerprint recognition, iris scanning, and facial recognition is a key driver propelling the growth of the biometric payment market. For instance, Mastercard has a new service allowing consumers to use native device biometrics to make purchases without passwords, Qualcomm has built a new automotive biometrics platform with help from partners including Daon, and HID Global has integrated face biometrics into a partner’s kiosks. Moreover, the rising need for secure and convenient payment solutions due to vulnerabilities in traditional authentication methods is boosting the biometric payment market globally. Thus, these biometric payment market trends drive the adoption of biometric payment which is a point-of-sale (POS) technology. However, privacy and data security concerns, as well as operational challenges related to privacy, security, and ROI, hinder the widespread adoption of biometric payment solutions and influence decision-making processes within the market. On the contrary, the rising use cases and formats of authentication devices and government initiatives promote financial inclusion and present avenues for growth and innovation within the biometric payment market, offering potential growth for expansion and development.

By type, the contact-based segment held the highest biometric payment market share in 2023. This is attributed to the fact that contact-based biometric payment systems offer enhanced security, reduce the risk of fraud, and provide a seamless user experience, which is driving their growth in the market. However, the contactless segment is expected to be the fastest-growing segment in the biometric payment market forecast period. This is attributed to the fact that the growing number of people using the contactless payment method, which increases security and shortens transaction processing time, is a significant factor driving the biometric payment market.

By biometric mode, the fingerprint recognition segment acquired a major share in 2023. This is attributed to the fact that as part of biometric payment systems, fingerprint authentication is widely adopted due to its reliability, security, and ease of use. This technology utilizes unique biological traits that are difficult to replicate, making it a preferred choice for secure transactions in an era where identity theft and fraud are on the rise. The convenience and security provided by fingerprint recognition have made it increasingly popular among consumers, especially with the widespread use of smartphones that integrate biometric authentication for payment systems, simplifying transactions and enhancing user experience. However, the iris scans segment is expected to be the fastest-growing segment during the forecast period. This is attributed to the high scalability, non-invasiveness, and stability offered by iris recognition technology. In addition, the accuracy and reliability of iris recognition, its high-security features, and its applications in various sectors such as healthcare, consumer electronics, automotive, and government contribute to the growth of this segment within the biometric payment market.

By application, the retail and e-commerce segment acquired a major share in 2023. This is attributed to the increasing adoption of contactless payment methods, the rise of e-commerce and digital payments, advancements in biometric technology for enhanced security, regulatory compliance, and the need to provide a better customer experience through secure and convenient payment solutions. However, the healthcare segment is expected to be the fastest-growing segment during the forecast period. This is attributed to the fact that the healthcare industry has unique requirements and challenges when it comes to implementing secure payment solutions, making biometric payment systems an attractive option for enhancing security and streamlining transactions within the healthcare sector.

Region-wise, North America dominated the biometric payment market size in 2023. This is attributed to the heightened emphasis on security and fraud prevention which is driving the adoption of biometric payment systems as a more secure alternative to traditional methods. The escalating threat of cybersecurity has also played a significant role in propelling the demand for advanced authentication technologies such as biometrics, enhancing transaction security, and reducing the risk of fraud. Moreover, technological advancements enable biometric payment in North America to adopt innovative investment strategies, optimize portfolio management, and enhance operational efficiency, further fueling market expansion. However, Asia-Pacific is considered to be the fastest-growing region during the forecast period. This is attributed to the increasing prevalence of digitalization efforts and the rapid adoption of advanced technologies. The region's expanding middle class, coupled with a growing emphasis on secure payment solutions, has further fueled the demand for biometric payment systems. The Asia-Pacific region showcases immense growth potential in the biometric payment market, with increasing consumer awareness and acceptance of innovative payment methods driving this growth trajectory. The need for enhanced security measures and convenient payment solutions in both regions has been a significant driver behind the growth of the biometric payment market in North America and Asia-Pacific.

With contactless payment cards accounting for 82% of all cards issued in the year 2022, biometrics is the next step in payment solutions, as it provides a convenient, safer, and more secure way to transact. Biometric-based payments are also a key aspect of a cashless economy, something that many societies are aiming for in the future.  

Key Findings of the Study

• By biometric mode, the fingerprint recognition segment held the largest share in the biometric payment market in 2023.
• By application, the retail and e-commerce segment held the largest share in the biometric payment industry in 2023.
• Region-wise, North America held the largest market share in 2023. However, Asia-Pacific is expected to witness the highest CAGR during the forecast period. 

The key players operating in the biometric payment market analysis include Fujitsu, NEC Corporation, Mastercard, Visa Inc., IDEMIA, Fingerprint Cards AB, Alibaba Group Holding Limited, VeriFone, Inc., Thales Group, and Google LLC. These players have adopted various strategies to increase their market penetration and strengthen their position in the industry.