We think of credit cards as a mature technology, but according to the Federal Trade Commission, more than 167,000 people in the U.S. reported a fraudulent credit card account was opened with their information last year. Fraud at self-checkout machines is also rampant. Data from the ECR Group shows that stores using self checkout experience 75% more shrink than stores with traditional checkout only.
It’s clear that retail transactions are desperately in need of an added security layer. New solutions powered by computer vision can automatically validate consumers’ identities by matching live images against an image on file. As a result, retailers can reduce the risk of shrink, while simultaneously offering customers who opt into secure payment programs additional fraud protection.
Here are five key ways that identity authentication solutions are using computer vision to offer customers more secure payments.
Self-checkout fraud remains a huge problem in the retail industry. According to an LPRC study of actual shoplifters, 100% claim to have committed self-checkout fraud. While computer vision technologies like facial recognition are already being used to recognize known self-checkout shoplifters, we expect that more retailers will start requiring individuals to opt-into an identity authentication programs in order to gain the benefit of using self-checkout machines. As an example, Amazon Go requires that customers opt into an identity validation process in order to purchase goods.
Credit Card Fraud Prevention
Fraudsters can often get away with stealing thousands of dollars of merchandise by the time a victim realizes their credit card or identity has been stolen. While rarely mandated by law, retail employees are often trained to ask to see ID when customers pay with a card. According to Consumer Reports, “Merchants can check your ID, but usually won’t. MasterCard says a merchant ‘may request but not require’ a customer to show ID, and American Express simply instructs merchants to ‘verify that the customer is the Cardmember.’”
Face recognition offers a means of identity protection by automatically validating customers’ identities during transactions. This acts as a powerful secondary form of identity in addition to credit cards.
Secure In-Store Pickup
People are increasingly purchasing goods online and then picking them up offline in retail stores. But in-store pickup fraud is a problem. According to TransUnion, “[in-store-pickup] presents an opportunity for fraudsters. Lack of communication and tracking across different sales channels makes it easier for criminals to bypass protections.” Facial recognition offers a means of instantly and automatically validating identity when customers come to pick up goods. This is just another way that identity automation can boost security during transactions.
Instant Age Verification
Retailers often sell age-restricted merchandise, and computer vision can be used as an additional means of authenticating customers’ age. This can also be used as a protection against fake IDs during transactions. In fact, facial recognition systems can even be used to estimate individuals’ age, alerting retailers when individuals who might be underage are trying to purchase age-restricted merchandise.
In addition to a second factor of identity validation during transactions, facial recognition systems can also enable customers to pay using their faces. Customers can opt into solutions to tie their financial details to their face. They can therefore use their face at kiosks to purchase merchandise. In fact, certain retailers around the world have already started rolling out pay-by-face kiosks. The truth is that this is actually far more secure than existing payment technologies like credit cards. Faces are far more difficult to spoof. We therefore expect far more retailers around the world to being using pay-by-face to offer customers enhanced identity protection and convenience.