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Pay By Finger

By Alison Embrey

NASHVILLE, Tenn. -- NACStech 2005 opened with a bang Monday, as retailers gathered for an innovative session titled “Biometric Payments: Convenience, Cost Savings and Security.”

Moderated by James Maxey, senior store systems development and maintenance manager for Valero Energy Corp., the session introduced a panel of retailers and industry experts well-versed in the workings of biometric payments, which are payment methods tied to a person's unique finger scan. In essence, a consumer can walk up to a c-store without a wallet or purse and buy a pack of gum by swiping an index finger, which has been previously linked to their debit or credit card.

Gray Taylor, vice president of research for NACS, opened up the session with an introduction to the macro forces spurring biometrics in today's society. Since the impact of 9/11, identity has become the cornerstone of security, and ID theft is at the top of mind in the consumer, Taylor said, which makes biometrics a viable solution.

“There is not one credit card, reader, RFID or device that can't be hacked into,” Taylor said to the crowd of retailer attendees. “Biometrics promises to be the foolproof methodology. It's very difficult to forge.”

One of the driving factors pushing biometrics into the retail world is the rising costs of credit-card processing that plagues retailers, Taylor said. Unweighted card processing costs for an average store run about $30,996 per year, Taylor said, and may have even surpassed utility costs for many retailers.

Rich Gladu, president of Apple Valley Foods Inc. with four c-stores in northern Virginia, began installing BioPay biometric payment systems in his stores in November 2003 and touts nothing but success.

“I liked what I saw and was very intrigued,” Gladu said. “Northern Virginia is a very competitive area with convenience stores on every corner. This gave me the opportunity to be cutting-edge with technology that maybe the guy down the street doesn't have.”

At Gladu's stores, biometric finger scan devices replace any check-cashing equipment, so any customer wanting to pay by check has to enroll in the BioPay system. “I haven't found anybody who doesn't want to sign up for this because of fear of giving their fingerprint,” Gladu said. “This is the way things are going.”

Gladu also emphasized the growing acceptance for biometrics in the United States, citing that 85 percent of respondents to an Opinion Research Poll consider it acceptable to use biometrics to make transactions more secure.

The merchant benefits of biometric payments, Gladu said, are lower payment processing costs, increases in average purchase transaction, increased customer loyalty and improved operations. For the customer, increased convenience, secure transactions and decreased checkout times have made the choice to offer biometric payments worthwhile, he said.

The grocery channel is also making strides in biometric payments, as Paul Kapioski, president of West Seattle Thriftway, proved to the NACStech crowd. An upscale grocery store in the Seattle metropolitan area, Thriftway installed Pay By Touch biometric payment devices in 2002 to a throng of national media attention.

Thriftway customers who want to use the Pay By Touch option are required to enroll at least one payment card to get started. “Customers can enroll as many cards as they want in their electronic wallets,” Kapioski said. “We ask for the PIN/debit first to move customers away from credit cards and try to reduce our cost there.”

During the first 12 weeks, 2,440 customers had enrolled in the service, and 34 percent of electronic transactions used Pay By Touch, Kapioski said.

“Pay By Touch appealed to all sectors of the community, but particularly the senior citizen demographic,” Kapioski said. “They have been around and seen things change, and they recognized the technology and that this was a safe and convenient way to shop.”

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