Cash, charge or fingerprint?
Retailers experimenting with biometric payments

Washington Post | June 10 2005

Three or four days a week, Darren Hiers gets lunch at a Sterling convenience store near the car dealership where he works. He grabs a chicken sandwich and a soda and heads to the checkout counter, where a little gadget scans his index finger and instantly deducts the money from his checking account.

Hiers doesn't have to pull out his wallet to buy lunch -- and if it were up to him, he'd never have to write a check or swipe a credit card again.

The finger scan used at the shop in Sterling, known as a biometric payment system and made by a Herndon firm, is just starting to be installed at convenience stores and supermarket chains around the country, another step in a revolution that is turning the human body into the ultimate identification card.

Already faces and fingerprints are used to track visitors coming into the country. Computer passwords are being replaced by thumbprints at some companies and iris scans are giving consumers in England and Germany access to their bank accounts at ATMs.

The owner of BioPay LLC, which makes the technology used at the store, predicts the finger scan soon will be ubiquitous, offering speed and convenience for consumers. But civil libertarians have raised privacy concerns, citing some recent problems. In February, ChoicePoint Inc., a background-screening company that collects personal information -- including biometric data -- said it accidentally sold more than 100,000 individual profiles to identity thieves.

For many people, a fingerprint means one thing: a police record. That association could be enough to make many average people wary. The car rental business already has had some experience with this. Toward the end of 2001, Dollar Rent a Car began fingerprinting its customers in an effort to combat theft. The experiment lasted just four months, until consumer complaints forced the firm to reverse its policy.

Biometric payment systems work by connecting images of an individual's fingerprint to his bank account. At the Sterling convenience store, a BP gas station owned by Rich Gladu, users enroll by handing the cashier a personal check (verified with a driver's license) that is scanned into the computer. Then the customer places each index finger on a tennis-ball-sized reader that captures the unique characteristics of his or her fingerprint.

‘A little easier’
The enrollment process takes about two minutes and from that point on, consumers can make purchases just by punching a 10-digit code (like a phone number) into the counter-top terminal and placing a finger on the reader. The funds are subtracted directly from the customer's checking account, as a debit transaction would be.

"It keeps me from having to carry cash or a checkbook" said Hiers, who sometimes stops by the Sterling convenience store twice a day to get lunch, fill up his gas tank and pick up rations for his hour-long commute home to Charles Town, W.Va. "It makes my life a little easier, especially if I just want to get in and get out."

That's exactly what BioPay President Tim Robinson likes to hear. His company , makes the biometric technology used at the Sterling store and says it has a database of 1.8 million customers. Most of those consumers are using BioPay's technology as an identification verification for merchants cashing their paychecks -- an application intended to cut down on fraudulent checks. So if a customer cashes a fake paycheck, the store will be able to track the culprit, because the check will be associated with the individual's fingerprint. But by this summer 150 retailers will have installed the payment system.

Lowe's Food Stores Inc. will test BioPay's system at four of its 110 supermarkets. Next spring, it plans to install the technology at the rest of its stores, most of which are in North Carolina. More than 80 Piggly Wiggly Carolina Co. grocery stores in South Carolina and Georgia already have biometric payment systems made by Pay by Touch, a San Francisco company.

"Kids growing up now can't imagine that you needed a cord to use your telephone. Soon they're going to say, 'You mean you have to carry around a piece of plastic or a piece of paper to go buy something?' " Robinson said.

Biometric technology makers say the biggest advantage their systems can offer is speed at the checkout counter. Executives of Pay by Touch say a transaction on their system can be completed in about 14 seconds, compared with the 64 seconds to process a check, and 48 seconds for a credit card.

"We're all always convinced we've gotten in the long line. . . . Any way we can improve that experience, make it quicker, make it more secure, we're interested in doing that," said Michael Sansolo, senior vice president of the Food Marketing Institute, an industry trade group.

Robinson, of BioPay, said the real motivation for retailers will be financial. Credit card companies often charge retailers a fee equal to almost 2 percent of the total purchase price for each credit transaction. So for every $30 tank of gas bought with a credit card at the Sterling BP, the store pays a fee of 60 cents or more. But BioPay charges the store a flat 15-cent fee for each transaction, regardless of the size of the purchase.