https://www.cnet.com/news/macbook-air-2018-adds-touch-id-and-gets-a-new-security-chip/

Unlike the MacBook Pro's Touch ID, this sensor is on the keyboard and not on an OLED touch bar across the top row. Touch ID is Apple's fingerprint sensor used to unlock devices, first introduced on the iPhone 5S in September 2013. The biometric security feature is a faster, more convenient alternative to passwords. Though if you're concerned about law enforcement and court orders compelling you to unlock your devices, Touch ID might not be for you. 

The Touch ID on the the new MacBook Air doesn't just unlock your laptop though. Like Touch ID for your iPhone and the MacBook Pro, you can also use the biometric feature to shop using Apple Pay as well as to authenticate third-party apps. Your fingerprint data is encrypted and secured on Apple's T2 security chip, which uses Secure Enclave. That means all that data, including your passwords and your fingerprint, are stored only on that device and doesn't leave the MacBook Air -- even Apple wouldn't receive that data.