Amazon long ago redesigned the way consumers shop and pay online, and it envisions a retail environment where payments happen just as seamlessly and shoppers never even need to slow down to check out.
Amazon's model would allow shoppers to simply grab the desired items and walk out, while a host of systems silently identify the shopper and the merchandise, and then charge the customer upon leaving the store, according to a U.S. Patent application Amazon filed.
For many retailers, it's a somewhat Utopian vision of an entirely frictionless experience, which has been suggested in retail circles but has never materialized. However, Amazon's market clout and resources could make this process a reality, said retail payments consultant Todd Ablowitz, president of the Double Diamond Group.
"Lots of companies have chased after this. In the nineties, when item-level RFID was all the rage, this was the vision of the future store," Ablowitz said. "But Amazon has the resources. They can do the long-term R&D investing."
Amazon's patent describes a system that goes beyond RFID and incorporates technology reminiscent of Microsoft's Kinect, a hands-free game controller that tracks users' movements and gestures. Cameras placed around a store would identify shoppers and merchandise in conjunction with an RFID tagging system.
The closest thing to this system in retail stores today is the Bluetooth beacon, which broadcasts a short-range signal to shoppers' mobile phones to identify and communicate with each person in the store. This system works only if shoppers opt in and install the app on their phones, so it is used primarily for promotions and offers instead of more critical functions like payments.
There are many Beacon projects (or iBeacon, to use Apple's terminology) underway today. PayPal even predicts Beacon will be bigger than EMV-chip cards, which are being pushed by a card network mandate. The reason Beacon could be more prominent is it adds value in identifying shoppers before they reach checkout, according to PayPal.
In the past, even the most optimistic item-level RFID visions still required some kind of checkout. Walmart's most ambitious effort involved shoppers using their mobile devices to scan bar codes as they put items into their carts, but that approach still forced them to go through a checkout lane (albeit a self-checkout to scan a single bar code on the phone's screen).
Walmart is still working toward the vision of the seamless payment, but has not yet reached it. "The most seamless experience for a consumer is to not pay at all and some people do that but we want those payments, said Kara Kazazean, director of payment services for Walmart, at SourceMedia's annual Card Forum and Expo in Chicago this month.
Where Amazon's system would diverge from past efforts is in its underlying technology; rather than require the consumer to download and activate an app a significant hurdle of a supposedly instantaneous mobile payment system Amazons system would use facial recognition to identify customers, and would fall back on RFID tags in their wallets for verification.
Amazon would like to use this approach at stores, but also sees this working at its warehouses. The system also incorporates customer relationship and inventory management. The system could also be used with a loyalty program to automatically apply any offers available to the shopper.
Amazon did not respond to a request for comment, but described the system extensively in its patent filing.
The system would identify customers by facial recognition, user ID cards (potentially with embedded RFID tags) and by a known mobile device they might be carrying. Also, an app running on that mobile device could assist in authentication. "The portable device and/or application may include a unique identifier that is provided to the inventory management system and used to identify the user," the patent application states. "When the user is identified, a user profile associated with the user and maintained by the inventory management system is determined. In some implementations, a payment instrument (e.g., credit card, debit card, check card, etc.) is associated with the user profile and may be checked to confirm that the payment instrument is valid and may be used by the user to pay for any items picked by the user."
The way Amazon described the methodology, it could be implemented in several different ways, but most likely it would use video cameras on the ceiling and positioned in various places throughout the retail floor. Wi-Fi, Near Field Communication and Bluetooth could also be used. A mobile device's GPS capabilities could also come into play, the filing said.
The application also touched on using weight measurements to identify both the merchandise and the customer. "In addition to cameras, other input devices, such as pressure sensors, infrared sensors, a scale, load cells, a volume displacement sensor, a light curtain, etc., may be utilized with the implementations described herein."
And yes, that weight can also be used to identify the shopper, according to the filing.
The intent of the system described in the patent is to be entirely automated system, without requiring any intervention from retail store staff. Amazon envisions using microphones to "record sounds made by the user and the computing resources may process those sounds to determine a location of the user."
The system could also use a shopper's purchase history to help give clues to the identity of items that are placed in a cart.
Is Amazon's planned system better than Beacons? The answer may come down to cost and user preference. Depending on the manufacturer and the amount purchased, Beacons could cost $10 to $50 each, and retailers would need to place one in each department to properly track shopper movement and activity. But retailers already use cameras in their stores for security purposes, so there may be a way to combine Amazon's technology with those existing cameras (much like shopkick was able to combine its audio-based Beacon system with stores' existing sound systems).
But the final system Amazon develops could deviate substantially from the one described in the patent, if it ever comes to light. The development of Apple Pay shows just how this could happen.
Back in 2012, Apple was awarded a patent that described a system for authorizing mobile payments by swiping a finger across the screen of an iPhone. This gesture was meant to mimic the process of swiping a card while also providing an added step for authentication. When Apple Pay finally came to market in 2014, the "card swipe" process was replaced by Apple's Touch ID fingerprint sensor.
If Amazon brings its invisible payment system to market, it may not be the Frankenstein-like combination of facial recognition, RFID, Bluetooth, NFC, weight and audio sensors described in the patent. It would likely be a much more streamlined system that mimics the one-click simplicity of shopping online.