Partnership expanded to capitalise on biometric features of latest smartphone launch and offer alternative secure payments to users
PayPal and Samsung have this week extended their collaboration with a new biometric feature that will allow users of the new Galaxy S5 smartphone to use fingerprint authentication for mobile payments with PayPal merchants.
PayPal claims that this is a major innovation in m-payment, introducing a new level of convenience for consumers compared to the familiar login-and-password authentication model.
Overcoming privacy issues
Eden Zoller, principal analyst at Ovum
, suggested that overcoming privacy issues would be a challenge. “We think consumers will be wary and need some convincing due to security concerns," she said.
In Ovum’s 2013 Consumer Insights Survey, almost half the survey respondents (49%) ranked lack of security as their priority concern with mobile payments. She said consumers already worried about the security of established m-payment mechanisms are likely to view a new technology and process with suspicion.
“On the positive side, Samsung is a hugely popular smartphone brand with global reach, while PayPal is a trusted payments service provider. This is a powerful combination," commented Zoller.
"PayPal stresses that fingerprint authentication is a secure feature based on a FIDO
[Fast Identity Online] ready software implementation with all credentials stored remotely in the cloud. PayPal is the first member of the FIDO Alliance to produce a solution of this kind; other members include Google and Microsoft."
Authentication ecosystem growth
The PayPal fingerprint authentication feature will go live on the Samsung Galaxy S5 in 26 markets this April. PayPal expects more device manufacturers to adopt the technology going forward.
The announcement, made at the Mobile World Congress on Monday, extends a partnership established last autumn that enabled PayPal to be used as a payment option for Samsung smartphone users buying apps, music, movies, TV shows, e-books and games via Samsung Apps and the Samsung Hub preloaded onto every device.
The service enables Samsung App developers to get paid directly using the secure service and pre-registered Samsung smartphone users can authenticate with PayPal to make a purchase without having to enter their banking details.