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The Naked Truth About Biometrics
By Gene Retske |
User Acceptance Spurs Growth
“It’s very simple to use,” chirped the attractive young store manager. “Once you get all signed up, you only have to put your finger on the pad, and you can pay for your groceries.” Her enthusiasm was obvious. “You can shop NAKED!”
Now, most customers have, thankfully, not taken her up on the offer to shop unclothed, but two companies are making great inroads in getting customers to replace ATM cards with body parts. The most frequently used part is a fingerprint. Iris recognition technology is being developed, but eye safety concerns have delayed this aspect. The fingerprint system is very easy to set up and use later to make purchases. When an account is established, usually at a kiosk in the store, the customer presses his finger on a pad, where his print is scanned, analyzed and identified with a unique code.
This biometric code is said to be more secure than PINs, magnetic stripe cards and other conventional means of identification. Biometrics has a major advantage in that the customer does not have to have a physical card, remember a PIN or carry anything special with them. All they need is their fingerprint, which most people have with them at all times, thus the “shop naked” statement.
Two Major Suppliers Slug It Out
The two major competitors for store based biometric systems are BioPay, of Herndon, Virginia and Pay By Touch, located in San Francisco, California. BioPay recently announced that it has hit the two million mark in number of customers that are enrolled. Pay By Touch has recently received $130 million in private financing, and has installations in nine states.
Both companies have installations at Piggly Wiggly stores. BioPay has its system in all of the North Carolina Pigs, and Pay By Touch is in South Carolina and Georgia Pigs. The systems operate similarly, storing account information and biometrics in a central database. The online terminal reads the fingerprint, looks up the account and handles the transaction. This similar approach in close geographic locations should provide an interesting test bed for comparing user acceptance.
The Patent Wars Could Rage
As with most high tech innovations, there are patent issues that can arise, and biometrics is no exception. Pay By Touch claims to have more than two-dozen U.S. issued patents covering biometric transactions. BioPay has recently been granted a patent covering the check cashing process it markets as BioPay Paycheck Secure. The patent, #6,957,770, dated October 25, 2005, covers “methods for speedy enrollment of check presenters and automatic assessment of transaction fees based upon merchant-defined rules.”
Just Like the Good Ol’ Days
So far, user acceptance has been high, with busy shoppers happy with being able to complete purchases without fumbling for a card in a purse, or memorizing a PIN number. One senior shopper in South Carolina said that it was the old days again.
“When I was a little girl,” said the unidentified Piggly Wiggly shopper leaving the Irmo, South Carolina store, “the store owner knew everybody. We just showed him what we were buying and he wrote it on the account. This is almost the same.” She said that the scanners used to get the price of the items, and simply pressing the finger on the bio pad, made her feel like she was being recognized as a person, not just a credit card, or a number.
Besides the personal feel of biometric authorization, there is a convenience factor. Coming home from the gym, or forgetting your wallet or purse is no problem, as long as you still have your original finger with you. It has all the capability of a mag stripe card. Security is high because a finger cannot be lost or stolen like a physical card can. Customers who would not use ATM cards have shown a willingness to try bio.
Both systems have the capability of linking multiple accounts, including bank accounts and credit or debit accounts to the fingerprint, giving consumers a great deal of flexibility. The merchant has to have a fingerprint pad and the supporting software, but once in place, there are significant savings in processing fees if their customers pay using fingerprints linked to their bank accounts--up to 75 percent over straight credit card fees.
If user acceptance continues to increase, and merchants see that the convenience and speed has a positive impact on the customer experience, many more customers may abandon the card, shop naked and just give them the finger on the way out.
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