The North Face Just Destroyed Trump's Simplistic Opinion On Jobs

Donald Trump has a lame excuse for outsourcing the production of his clothing brand. The North Face, meanwhile, is proving that it's possible to keep business local. 

The Republican presidential front-runner has been criticized for using overseas manufacturing for items in his Donald J. Trump Signature Collection of suits and ties. When pressed on the issue during the GOP debate in Detroit on March 3, Trump said it's cheaper to produce clothes in, say, China and Mexico, than in the United States.

"They [these countries] make it impossible for clothing-makers in this country to do clothing in this country," Trump said. 

While he's right that it can be pricey to make clothes in the U.S., often because of high labor costs, there is a growing demand for locally sourced goods. Americans want to buy domestic -- and apparel companies like The North Face, which recently expanded its made-in-America offerings, are listening.

The North Face's newest clothing line, which launched March 1, is made entirely in the states. It's the second iteration of the company's Backyard Project, which "is about connecting with local artisans right here in the U.S.A. It’s about knowing which farms grew your cotton, who spun the yarn, or how your product was dyed,” Sumi Scott, The North Face's director of sportswear, said in a statement.

The new line features hoodies for $90 and T-shirts for $40. They're made with cotton sourced from farms in California and Arizona, spun in the Carolinas and sewn in factories in Los Angeles, according to James Rogers, sustainability manager at the apparel company. North Face did not provide sales figures for the line. 

Bright Black/The North Face

The Backyard Project is now available in several new styles and colors.

The company unleashed its original Backyard Project series in 2014. The year before, nearly 80 percent of Americans said they preferred American-made products over foreign-made ones, per a survey from Consumer Reports. Market research by The North Face confirms these findings, Rogers told HuffPost.

Production of domestically made clothes jumped 35 percent between 2009 and 2013, according to American Apparel and Footwear Association, an industry trade group.

“There’s starting to be this consumer base that appreciates [locally sourced products],” Tim Kraft, assistant professor of business administration at the University of Virginia's Darden School of Business, told The Huffington Post. “A lot of it is around food, and it’s an interesting concept to take to other retail products.”

The trend is still small, though. In 2013, only 2.6 percent of the clothes sold in America were made on U.S. soil. Some apparel companies, like workwear brand Carhartt, are now focusing on producing more affordable "Made in the U.S.A." clothing, in part to help their garments appeal more to shoppers. 

In addition to supporting American businesses, producing apparel in the U.S. probably has a lower energy footprint than manufacturing garments in, for instance, China or India, two of the major countries exporting garments to the U.S.

"Facilities [in America] are going to be more environmentally compliant," Beril Toktay, faculty director of the Ray C. Anderson Center for Sustainable Business at Georgia Tech's Scheller College of Business, told HuffPost. 

But making clothes in America doesn't 100 percent guarantee that they'll have a smaller environmental footprint. For instance, sourcing cotton from California, as The North Face's Backyard Collection does, might sound like a questionable move, given the state's historic drought. 

"If The North Face is purchasing cotton from California, I would actually be a little worried about the local footprint of their sourcing strategy," Toktay said.

Rogers insists, however, that "California cotton farmers are some of the most efficient in world."

JC Video Productions/The North Face

Cotton.

Sourcing locally has another potential advantage: It can cut down on the lag time between when a producer places an order for materials and when that shipment arrives. This can make companies nimbler and more responsive to what shoppers want. 

"If you can manufacture locally, then you can respond much more rapidly to consumer demand," Toktay said.

Shorter supply chains are also easier to police. Long, complicated networks make it hard for retailers to know whether the farms and factories contracted to make its materials are meeting high labor standards.

"The retailers don’t often have a lot of direct, day-to-day contact with all these factories,” Elizabeth Cline, author of Overdressed: The Shockingly High Cost of Cheap Fashion, told the U.S. News and World Report in 2014.  

Spanish textile company Inditex, which owns the popular Zara brand, has relied on local and regional sourcing for years. In 2012, Zara sourced almost half of its products from Spain, Portugal and Morocco, creating a short supply chain that could be manipulated quickly in response to changing tastes.

Inditex's strategy may be paying off. In 2015, the company’s profits rose 15 percent, and Zara's CEO, Amancia Ortega, became the world’s second-richest man. However, the company has dealt with repeated allegations that some of its suppliers in Brazil, Argentina, Turkey and Eastern Europe used sweatshop labor to produce Zara garments. 

While the North Face can keep a close eye on its Backyard Project line, this is just one part of the company's overall business. For the rest of its products, the North Face sources from 33 countries, including the U.S. 

Bright Black/The North Face

Employees at JC Industries trimming threads on the Backyard Project t-shirts as the final stage in the production process. JC Industries, based in Los Angeles, started in the 1970s making custom trims and has expanded its operations over the years to offer vertical manufacturing.

The North Face shares parts of its supply chain with its parent company VF Brands, which has attracted criticism in the past for sourcing from factories in Bangladesh, a country notorious for weak labor protections.  

However, after the 2014 collapse of the Rana Plaza garment factory building in Bangladesh killed over 1,100 workers, VF founded a coalition with 26 other companies to collectively dedicate five years and $50 billion to improve labor conditions in the factories they use. The North Face belongs to this coalition through VF. 

Despite the advantages of making goods in the U.S., domestic production has some drawbacks. Areas where consumers live don’t always have the highest quality source materials, for example. 

When you think about locally sourced goods, Kraft said, you have to ask: “Is there a potential quality risk?” 

The North Face hopes the Backyard Project will show that companies can make quality clothing while returning to traditional ways of producing goods, according to Rogers.

"Really, this is an old way of making apparel," Rogers said. 

Trump seemed to say during the March 3 debate that he would move his clothing operation back to the U.S., where his "Make America Great Again" hats are already produced. Doing so would bring his company's practices into line with his oft-repeated vow to "bring jobs back" from foreign countries. 

However, as tends to be the case with his grand promises, it's anyone's guess whether he'll follow through on this one.

The Trump campaign did not respond to a request for comment. 

Editor's note: Donald Trump is a serial liar, rampant xenophobe, racist, misogynist, birther and bully who has repeatedly pledged to ban all Muslims -- 1.6 billion members of an entire religion -- from entering the U.S.

4 Things You Need To Know About The Latest Jobs Report

The monthly jobs report came out on Friday, and things are pretty good overall.

The big headline numbers were great: The economy added 242,000 jobs in February, much higher than the 195,000 that economists estimated, and the unemployment rate remained at 4.9 percent, which is nice and low. 

But if you drill down into the data, the picture is a little murkier.

Here are four things we know about the economy from the details in this report:

1) Wages aren't growing much, and it's hard to say why.

Average hourly earnings were down by 3 cents in February, to $25.35. Year-over-year, wages are up about 2.2 percent. That's not great -- although, thanks to very low oil prices and low inflation, it's not terrible either. But it's worth asking why wage growth since 2010 hasn't been as robust as growth in previous recoveries. 

Shane Ferro/Huffington Post

2) Nonetheless, people are coming back into the labor force.

As we said earlier, the economy added 242,000 jobs this month. But perhaps more importantly, details in the household survey show that more than 500,000 entered the labor force by starting to look for work again. In order to be officially unemployed, a person must not have a job and must be looking for work. Discouraged workers, who have given up looking for jobs, aren't counted as part of the labor force. It's a sign of a healthy economy when those people start looking for jobs again, even if they don't find work immediately.

3) But the unemployment rate for blacks is twice the unemployment rate for whites.

The unemployment rate for whites in the United States is 4.3 percent. For blacks, it's 8.8 percent. This is an economic dynamic that has been persistent since the Labor Department started tracking unemployment by race back in the 1970s. The chart below is not really America's best look: 

Shane Ferro/Huffington Post

There's a huge racial disparity in the unemployment rate in this country.

4) There is a lot of growth in low-wage industries.

The retail industry added 55,000 jobs last month, and food service added 40,000. These have been some of the strongest growth industries over the last few years, which means the economy is adding a lot of low wage, service sector jobs. That said, the economy also added a lot of health care (38,000) and construction (19,000) jobs in February, which tend to pay quite well. 

This Could Explain One Of The Biggest Mysteries Of Cheap Oil

The price of oil has crashed over the last year and a half. In the middle of 2014, a barrel of crude cost over $100. Now it's worth just over $30.

Normally, such a collapse would lead OPEC to pump less oil. The idea is that less oil on the market helps keep prices up. But despite a historic fall in oil prices, the Saudi Arabian-led international oil cartel hasn't budged: The biggest step it has taken so far is offer to freeze production at its current record levels. Production cuts are not on the table.

The big question is, why? One theory is that OPEC simply has less control over the oil market than it used to, thanks to the shale gas revolution. Another possibility is that OPEC wants oil prices to be low precisely in order to drive shale oil producers, which have higher costs, out of business. 

Here's a simpler hypothesis: Maybe the Saudis aren't cutting production in the face of low prices because huge portions of their oil reserves might eventually become worthless. That's what James Rowe, an environmental studies professor at the University of Victoria, thinks. 

If that happens, today's oil prices won't look low -- not when there's an overabundance of an asset that can't be sold. But oil prices are the lowest they've been in 12 years, you say. How could they ever be considered high? 

This explanation relies on two related ideas: a carbon bubble and stranded assets. The carbon bubble refers to the fact that energy companies around the world are sitting on five times more fossil fuels than can be burned, the research nonprofit Carbon Tracker estimates. Those assets, worth about $2 trillion, are referred to as "stranded assets."

So what does that mean for an oil company that controls a state? It might as well sell as much oil as possible while still can.

Saudis can't sell oil for $100 a barrel, obviously, but Rowe said they "appear to be positioning themselves for the next best option: gobbling up as much of the earth’s remaining carbon budget for themselves before the bubble bursts. Isn’t it better to sell at a lower price than to receive nothing at all from vast unburnable reserves?"

By the time the world has moved on from oil, Rowe said, Saudi Arabia "will have sold what it could while its reserves were still burnable."

And the country will have moved on as well. Its oil minister, Ali Al-Naimi, has said Saudi Arabia will be a solar exporter by the middle of this century. 

Warren Buffett Is Wrong About Climate Change

Warren Buffett doesn't want you to know how his empire is preparing to deal with the disastrous effects of climate change. In fact, he said in a letter released Saturday, he isn't exactly sure this whole "climate change" thing is real, anyway.

In his annual letter to investors in his conglomerate Berkshire Hathaway, the billionaire investor fought back against a proposed shareholder resolution demanding his insurance subsidiaries measure and disclose the risks that climate change poses to their business and how the company is responding to the threat. Buffett compared fears over climate change to the brouhaha around apocalyptic Y2K predictions.

“It seems highly likely to me that climate change poses a major problem for the planet,” the 85-year-old wrote in the letter, released Saturday morning. “I say ‘highly likely’ rather than ‘certain’ because I have no scientific aptitude and remember well the dire predictions of most ‘experts’ about Y2K.”

Insurance companies take on losses after major weather disasters (think droughts, Hurricane Katrina and other big storms), so it makes sense they'd be concerned about climate change. If that's true, why would Buffett say he's not so sure this is real? Because skepticism is better business.

Buffett isn’t denying climate change, but rather using language climate deniers feel comfortable with and will likely cite in future attempts to derail environmental policy. Climate change affects Buffett's business: He owns a Nevada utility that has fought and won against solar development in that state, and his railroad, Burlington Northern, in large part depends on the demand for coal and oil.

Buffett argues in favor of seeing climate change as a likely risk to the world, but against the need for more oversight, transparency or regulation of his companies. It’s a position he’s taken before -- Buffett argued against designating reinsurers, of which he owns the world’s fifth-largest, as too-big-to-fail institutions. Though he said he never spoke directly to regulators about the issue, he made his views public. Regulators, thus far, have agreed.

Why Buffett's Words Matter

Markets, governments and companies aren’t properly pricing the risk of climate change. For instance, are beachfront homes in low-lying areas as valuable as their owners believe? Experts reckon that only once markets and others attach a price to the threat of climate change will the rest of the world finally move to limit the potential consequences. If insurers -- which must grow their assets in order to make good on their guarantees -- measure the potential losses they could incur as a result of climate change, they can then price that risk. Then everyone else could follow.

Buffett's views against disclosure put him in sharp disagreement with Bank of England Governor Mark Carney, who has said that financial markets can help limit the effects of climate change, but only if companies -- such as insurers -- supply the kind of information that Buffett doesn't want to disclose. 

In September remarks to the insurance industry, the chief overseer of the world’s third-largest insurance sector warned about the numerous economic and financial risks posed by climate change. Carney urged companies, particularly insurers, to start taking seriously their responsibility to measure their potential losses. Their own solvency could be at stake, Carney warned.

Insurance companies invest their money in places like the stock market. But “stranded" oil, gas and coal reserves, left in the ground due to the world’s commitment to halt rising temperatures, could render related financial assets worthless. Or the disruption of trade resulting from an extreme weather event could affect related investments.

Cynthia McHale, director of the insurance program for Ceres, a nonprofit group that pushes investors to pay attention to the financial risks of climate change, said in an interview earlier this month that neither insurers nor their government overseers have a good handle on the risks that climate change poses to insurers’ various financial assets.

McHale compared the situation to the one faced by big banks in 2008, when few sufficiently realized the magnitude of potential losses from the U.S. property bust. 

Weathering Heights

Buffett's case against the resolution boils down to this: “Thinking only as a shareholder of a major insurer, climate change should not be on your list of worries.”

First, he said, his company can handle any possible losses thanks to rising premiums. Because insurance policies are typically written for one year and repriced annually, Buffett's company can hike premiums to better account for the heightened risk of climate change-driven losses.

Second, Buffett asserts that climate change has produced neither “more frequent nor more costly hurricanes nor other weather-related events covered by insurance.”

But eight of the 10 costliest hurricanes in U.S. history, in terms of insured losses, have occurred since 2000, according to the Insurance Information Institute. Nine of the 10 costliest floods in U.S. history, when measured by payouts from the federal government’s National Flood Insurance Program, also have occurred since 2000, according to the insurance group.

NOAA

The U.S. experienced five different types of extreme weather last year. 

Munich Re, the world’s biggest reinsurer, estimated that extreme weather events led to $510 billion in insured losses from 1980 to 2011.

Carney said that according to Lloyd’s of London, the world’s oldest insurance market, the roughly 8-inch rise in sea level at the tip of Manhattan since the 1950s increased the insured losses from Hurricane Sandy by 30 percent in New York alone.

PAUL J. RICHARDS via Getty Images

A house in Staten Island, New York, hit in Hurricane Sandy. Scientists say we should prepare for more weather events like the massive storm.

Insurance companies should care about climate change from a selfish perspective if they want to stay in business. Carney has warned that insurers that jack up premiums or exit markets after realizing the potential losses associated with climate change could unwittingly cause the value of their own assets to shrink.

He also warned about potential losses from claims on policies written by insurers. For example, insurance companies could be forced to make massive payouts if victims of climate change successfully hold accountable companies that contributed to it. He likened the situation to the one faced by U.S. insurers stung by tens of billions of dollars in losses from asbestos claims.

In fact, Carney said that as a result of recent weather trends, some now estimate that insurers are undervaluing their potential losses by as much as 50 percent.

Insurance companies caught unprepared for the effects of climate change could cause problems for government officials and put taxpayers at risk.

For example, governments may have to cover markets that insurers dump as a direct result of climate change, the Bank of England chief said, putting taxpayers on the hook.

Bloomberg via Getty Images

Mark Carney, the U.K.'s top central banker, says insurers may be undervaluing their potential risks by 50 percent. 

What Could Change If Insurers Opened Up About This Risk

Disclosing climate change information would improve policymaking, Carney said. It could make climate policy more like monetary policy, where officials who set interest rates often tinker with their stance based on markets’ reactions.

The Financial Stability Board, a global group of the world’s financial regulators, wants financial companies to disclose their risks, too.

Some state insurance regulators in the U.S. are demanding insurers take the threat posed by climate change into account when investing their customers’ money and underwriting insurance policies. Washington state’s insurance regulator, Mike Kreidler, has criticized some insurers for failing to take climate change risks seriously, arguing their own solvency was at risk.

Buffett sounded more alarmed by the prospect of climate change in 2007, when scientific evidence of the impacts of climate change was less well-understood. In his annual letter that year, Buffett wondered aloud whether the deadly and expensive hurricanes of 2004 and 2005 marked the first warning of a new type of climate.

“It would be a huge mistake to bet that evolving atmospheric changes are benign in their implications for insurers,” Buffett wrote in his letter.

He warned that it was “naïve” to think of Hurricane Katrina -- the costliest hurricane in U.S. history -- “as anything close to a worst-case event.”

“These could rock the insurance industry,” Buffett added.

 

Half Of New Cars Could Be Electric By 2040

Electric vehicles could make up half of all new car sales by 2040, as long as oil prices eventually increase, according to a study released Thursday by Bloomberg New Energy Finance.

The cost of the lithium-ion batteries that power electric vehicles is quickly decreasing, but sales suffered last year as oil slid below $30 per barrel, making gas-guzzling vehicles more affordable in the United States. If oil remains at rock-bottom prices, it could delay electric vehicles from becoming mainstream for at least the next four years.

“In a scenario where they become widespread in fleets and ride sharing scheme, new EV sales could reach 50% of new car sales by 2040,” Salim Morsy, senior analyst at BNEF, wrote in the study. “However, persistently low crude oil prices could also keep adoption as low as 25% by 2040.”

Electric vehicles currently make up about 1 percent of global annual car sales. Four major factors will determine whether they'll make up half of the market by 2040.

First, battery prices must continue to fall. This is likely to happen for a few reasons. Demand continues to be high, as more automakers release electric vehicles and the energy storage industry begins to pick up pace. To fill those orders, manufacturers are upping their production. Tesla, for example, is building a $5 billion factory in Nevada that will, at its peak, produce more lithium-ion packs per year than were created in the entire world in 2013.

“It’s very important, insofar as being a first move for establishing large-scale manufacturing assets globally,” Morsy told The Huffington Post on Wednesday. “But, relative to the install demand needed in the future to supply what we project to be demand, it is certainly not as important.”

Second, self-driving technology must become commercially viable. At the Consumer Electronics Show in Las Vegas last month, nearly every major automaker unveiled some kind of autonomous driving technology. And with good reason: Google is testing driverless, electric cars. Tesla just released a limited autonomous feature that allows its cars to steer themselves. Uber last year raided Carnegie Mellon University's robotics department, hiring away its top scientists to develop self-driving technology that will eventually replace its drivers. 

Analysts expect Tesla, Uber and other car companies to eventually own and operate fleets of autonomous vehicles. If they're advanced enough to drive themselves, they'll ideally be advanced enough not to use oil.

Third, oil prices need to bounce back. Unless the price of crude returns to $50 and $70, as some predict it will by 2020, electric vehicles are unlikely to exceed 5 percent of new sales in most markets for the next four years, Morsy said. Low price projections actually halve electric vehicles’ market share forecast. If current oil prices continue into the next decade, electric vehicles may only make up 25 percent of new car sales by 2040.

Fourth, the electric auto industry must overcome the fact that it’s navigating a combustion engine’s world. By 2030, BNEF expects charging ports to become standardized, much in the same way any vehicle on the road now can connect to a petrol pump at any gas station. Improved infrastructure -- and the normalization of plugging your car in nightly at home or at the office during the day -- will help the industry clear the range issue that has long dogged it. Just as no one likes having a dead smartphone, no one wants to be left with a car that runs out of battery.  

“By and large, by 2030, we think the infrastructure issues around charging EVs will be addressed,” Morsy said. “That means standardization around charging for vehicles -- at the moment, it’s not a standardized market -- as well as availability of charging points.”

Yet one of the biggest challenges to electric vehicle adoption may not be an economic headwind, but political sabotage. Last week, HuffPost reported that billionaire brothers Charles and David Koch are planning to launch a $10 million campaign aimed at once again killing the electric car. Still, at this point, the industry may be too far along.

Tesla Motors CEO Elon Musk, one of the most famous business leaders fighting to wean humanity off fossil fuels, summed it up nicely:

Sigh …https://t.co/VelOzAKIW6

— Elon Musk (@elonmusk) February 19, 2016

White House Predicts Robots May Take Over Many Jobs That Pay $20 Per Hour

The White House is worried that robots are coming to take your job.

In a report to Congress this week, White House economists forecast an 83 percent chance that workers earning less than $20 per hour will lose their jobs to robots.

Wage earners who receive up to $40 in hourly pay face a 31 percent chance they'll be replaced by robots, while workers who are paid more than $40 an hour face much lower odds -- about 4 percent -- of losing their jobs to automation.

The estimates underscore the myriad threats facing low-wage workers in America, who in recent years have been buffeted by stagnant wages, decreasing employment prospects and higher education costs if they wish to obtain additional credentials in pursuit of better-paying jobs.

In an economy increasingly defined by the yawning gap between rich and poor, White House economists worry that increased automation could exacerbate inequality as the well-paid enjoy the fruits of robot-fueled gains in productivity while everyone else is left to fight for scraps.

One study cited by the White House found that automation has particularly hurt middle-skilled Americans, such as bookkeepers, clerks and some assembly-line workers. A lack of additional training and education opportunities led these workers to settle for lower-skilled positions, and likely lower wages.

Already, the White House noted in its report, most economists reckon that changes in technology are "partially responsible for rising inequality in recent decades."

Robots and other advances in technology are forecast to displace a significant number of blue- and white-collar workers, according to 48 percent of experts surveyed by the Pew Research Center in 2014. They also said that robots and so-called digital agents will displace more jobs than they create by 2025.

Many experts surveyed by Pew said they are concerned that the rise of robots and other technological advances "will lead to vast increases in income inequality, masses of people who are effectively unemployable, and breakdowns in the social order."

It's not a new worry. The famed economist John Maynard Keynes wrote in 1930 about "technological unemployment," or the theory that workers could be displaced due to society's ability to improve labor efficiency at a faster rate than finding new uses for labor.

But White House economists said they don't have enough information to judge whether increased automation will help or hurt the U.S. economy. For example, new jobs could emerge to develop and maintain robots or other new forms of technology.

"While industrial robots have the potential to drive productivity growth in the United States, it is less clear how this growth will affect workers," the White House said in its report.

There are two important questions, according to White House economists. First, if robots replace existing workers, will workers have enough bargaining power to share in their employers' newfound gains? Second, will the economy create new jobs fast enough to replace the lost ones?

Falling union membership -- some 11 percent of U.S. workers belonged to a union last year, down from about 20 percent in 1983 -- suggests that workers may not have much power to demand higher wages from employers who are automating them out of a job.

The economy could create enough new, good-paying jobs to help those displaced by robots, but the plight of manufacturing workers who have lost their jobs in recent decades as manufacturers moved abroad suggests that this, too, could be a challenge.

Instead, according to the White House, the key is to maintain a "robust training and education agenda to ensure that displaced workers are able to quickly and smoothly move into new jobs." With most Americans now financing higher education through debt -- about 1 in 8 Americans collectively owe $1.3 trillion on their student loans -- amid an era of sluggish wages, it's unclear whether higher debt burdens will lead to a better economic future.

MasterCard Wants You To Pay For Stuff With Selfies

MasterCard is rolling out a new strategy in the fight against credit card fraud: It wants you to pay for things with your face.

At the Mobile World Congress tech show in Barcelona this week, the credit card company unveiled its new “selfie pay” feature, which will allow cardholders to use an image of their face or a fingerprint to verify their identity when making payments online.

.@MasterCard is launching selfie payments https://t.co/jd71s9e4vp pic.twitter.com/LhCv6h3B0q

— CNNMoney (@CNNMoney) February 23, 2016

To use selfie pay, cardholders will have to download MasterCard’s app to their mobile device or tablet. Customers will still need to provide their credit card details to make purchases, but if further authentication is required, they can hold their device up to their face and take a photograph or use the device’s fingerprint sensor.

To prevent fraudsters from abusing the service, MasterCard said users will have to blink to prove they’re not holding a photograph up to the camera. The company said it also has algorithms in place that can detect if someone is using a previously-filmed video.

MasterCard plans on rolling out the feature in the coming months in several countries, including the U.S., Canada, the U.K. and parts of Europe.

The move came after a series of successful pilot tests last year. MasterCard told the BBC that 92 percent of its test subjects “preferred the new system to passwords.”

“I think the whole biometric space is a great way of protecting yourself when you are doing payments,” Ann Cairns, head of international markets for MasterCard, told CNBC. “There are a whole range of biometrics that say ‘I’m me, I'm making a payment’ and it just makes the whole thing more secure.”

According to The Verge, MasterCard is currently looking into other biometric security options beyond facial recognition and fingerprint scans. Specifically, the company is considering using sensors to read a person’s electrocardiogram -- the unique electrical signal produced by his or her heart.

“While even fingerprint or facial recognition requires input from the user, heartbeat recognition can take place seamlessly in the background,” The Verge explained. “You just wear a bracelet and it sends a signal to devices you're near to prove you're you.”

To prevent identity theft and fraud, many banks and companies are turning to biometrics to amp up security mechanisms. The Chinese e-commerce firm Alibaba recently introduced its own “selfie pay” feature while British bank HSBC announced new security measures this week that allow customers to authenticate their identity with a fingerprint or voice command.

“The problem with online payments has always been that the card doesn't need to be present, hence the credit card companies have charged more for the transactions to cover the costs of fraud,” Windsor Holden, head of forecasting at the U.K. tech consultancy Juniper Research, told the BBC. “If they can introduce a mechanism that makes the system more secure than merely asking for a password, then the hope would be that fraud levels decrease and the savings can be passed back onto merchants, and perhaps consumers too.”

Still, experts have warned that even biometric authentication measures like facial and fingerprint scans aren't foolproof. Privacy is also a concern.