Biometric Technology Cuts Payment Costs in Half, Says Boston Consulting

“The Future of Spending 2022.” (Boston Consulting Group)

Alert credit card companies in Korea. Biometric technology using facial, iris, voice, fingerprint and finger vein recognition could halve current credit card money transfer and mobile transaction costs totaling $2.7 trillion won ($2.2 billion) a year, the Boston Consulting Group said in a report on Friday.

“The 2.7 trillion won represents an approximation of the sum of 290 million hours and 110.7 million square meters of time and space required each year to process payments in the conventional method,” he said. BCG said in its “Future of Spending 2022” report.

Biometric systems could save up to 270 million hours and 1.3 trillion won in total costs – a change that also means customers would spend 10 seconds paying for services and goods offered, a significant drop from at 30 seconds past currently, according to the report.

BCG said Korea, which still relies heavily on the conventional mode of payment, lags far behind China and the United States, referring to Amazon Go, a cashierless convenience store that opened to the public in Seattle, Washington, in January 2018.

Last year, Starbucks opened its first cashier-free location in New York City, in partnership with the world’s largest online retailer.

BCG noted that Korean regulators should work on e-commerce rules to invite the kind of innovation seen in the United States and elsewhere, saying clearer guidelines designed to encourage fintech companies to seek new ways to do business were essential.

“Biometric identification is increasingly recognized as the latest technology in countries like the United States. The Korean government should strive to help local businesses take advantage of this opportunity,” said Park Yung-ho, a partner at BCG’s Seoul office in charge of financial institutions practices.

By Choi Si-young ([email protected])

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