Finger-Scan Payment Service Eyes Foothold in Market

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Supermarket chain Albertson's Inc. is testing a new service that lets consumers pay for purchases with a finger scan linked to their financial accounts.


Called Pay by Touch, the technology eliminates the need to carry credit or loyalty cards, checks or cash for purchases made at four Albertsons stores in Portland, OR. The consumer biometric system is already used by Southern supermarket chain Piggly Wiggly in a few of its stores.


"For large companies, this gives the ability to process transactions more quickly and also the ability to influence fees [paid to credit card companies]," said Tom Fischer, London-based Pay by Touch vice president of sales for Europe, Middle East and Africa. "Retailers are getting fed up with the increase in fees.


"[Also], loyalty cards are becoming more ubiquitous, and it's becoming more difficult for consumers to carry so many cards. And the other thing is, you can dispense with the card, although people haven't done it yet."


Shoppers at Albertsons' Portland stores can go to www.paybytouch.com and enter their ID numbers and account numbers for their preferred financial accounts and loyalty cards. They complete the process by visiting the Albertsons, where they activate their Pay by Touch wallet by adding a finger scan and search or telephone number.


The next time customers visit the participating Albertsons, they place their finger on a reader supplied by Pay by Touch, enter their search or phone number and choose from their previously enrolled financial accounts to pay for the transaction. The transaction is processed just as if a card or check had been presented. Also, loyalty points are automatically recognized.


Pay by Touch claims this payment experience is faster, more convenient and more secure than presenting financial account numbers and personal identifying information at the point of sale. The online enrollment addresses a consumer preference for technology that eases the shopping process, too.


Albertsons customers also can enroll at kiosks in the participating stores. Pay by Touch estimates this takes a few minutes, or less if the enrollment process is begun online and then completed at the kiosk.


Pay by Touch is free to the consumer. Once enrolled, the consumer can use Pay by Touch at any participating merchant. The user company pays for the technology and equipment.


The privacy issue crops up whenever Pay by Touch pitches for business. Pay by Touch explains that its finger-scanning technology does not store actual fingerprints. Instead, it creates a set of 40 data points that cannot be reverse-engineered into a fingerprint. The data points are encrypted and converted into a math equation to enable a secure identity match at the retail point of sale.


"It's not a fingerprint, it's a collection of data points that are encrypted and stored at secure IBM data centers," said Shannon Riordan, director of marketing at Pay by Touch, San Francisco. "No one sees what payment vehicle you used to pay, nor can they ever see your account numbers.


"The consumer's personal information is never sold or licensed to third parties. Even the retailer cannot see the contents of the Pay by Touch wallet."


Albertsons is running a promotion in the Portland area to popularize this new payment method. Each Pay by Touch transaction enters users into a sweepstakes to win a 2005 Toyota Prius or a $50 Albertsons store gift card.


On the other coast, the technology is being rolled out in all Piggly Wiggly stores by May. The Charleston, SC-based grocery chain has 120 stores in South Carolina and Georgia.


Pay by Touch is working to get other retailers to use its technology. Other supermarket chains using it include Pick n' Save and Thriftway. The technology is a selling point, as is its effect on loyalty programs.


"Because the loyalty card is included in the Pay by Touch wallet, retailers are able to make their loyalty programs more robust," Riordan said. "This is because purchases are always recognized. Cards left behind do not mean that a consumer's purchase isn't logged into the system.


"Also, the loyalty databases are refined one-to-one. When I shop, my loyalty account is recognized, not my household's. And more people will participate in loyalty programs if they don't have to carry around a card."


Mickey Alam Khan covers Internet marketing campaigns and e-commerce, agency news as well as circulation for DM News and DMNews.com. To keep up with the latest developments in these areas, subscribe to our daily and weekly e-mail newsletters by visiting www.dmnews.com/newsletters
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