The early morning exercisers who stop at Thrive Café in Loves Park, Ill. may be drenched in sweat and dressed in outfits devoid of any pockets, but they can still pay for their post-workout refreshments without a wallet or phone.

The café, which is located in the middle of an 80,000 square-foot workout facility, is one of the early wave of businesses that have adopted biometrics-based payments at the point of sale. Thrive Café uses palm vein scanners, which take an image of the blood vessels below the surface of someone's hand as a unique way of identifying each customer.

"So far, our members really like it," said Jason Rager, the cafe's owner. "It generates more sales because customers don't have to go out to the locker room to get their money — they can just pick it up and pay with their hand. It really is working out pretty well."

For Thrive's system, a customer scans a credit card, follows a few on-screen prompts and then presents a hand to be scanned. After that the system permanently associates the hand scan with the card on file.

"It is a pretty quick process. It takes something like 15 seconds," said Aimann Rasheed, CEO and cofounder of Biyowallet, the vendor that provided the palm scanners to Thrive. "Then, the next time they go into their store, they scan their palm and their credit card will come up."

So far, Rasheed estimates that about 40 percent of Thrive's sales come via a palm scan.

"Obviously we have a mixed crowd with a typical S-curve of adoption. Just like any technology, there are those early adopters. And then there are the people who wait and see, and then jump on. And then people who wouldn't use it at all," Rasheed said. "Most people think it's very cool."

But as with any gym routine, the biggest challenge is getting people to start.

"A few people saw it as the End of Times, which was kind of funny, but most people were pretty open to it," Rager said. "Especially 20 and 30 year olds. They see it as pretty cool and show it off to their friends."

How It Works

In the world of biometrics, the technology is typically used for either identification or verification. In identification functions, the system does what is called a one-to-many search, meaning it takes a reading and it searches an entire database looking for a match.

With verification systems, it is performing a one-to-one search, meaning it looks at a biometric and compares it with the one that is on file to see if the person who is being scanned is the person who she says she is.

With payments systems, the process is a two-step series, said Derek Northrope, head of biometrics at Japanese technology company Fujitsu.

"The first part is enrollment — establishing who is this person. Then the subsequent step is to establish 'is this person who they claim who they are,'" Northrope said.

Bigger databases and more precise readers add to the price. Balancing those costs against the benefits of biometrics is the name of the game, Northrope said.

If the system costs an extra $500 to install, but could potentially save $1 million in fraudulent transactions, then obviously it would make sense, Northrope said.

But if the business has a very low level of fraud, then there had better be another compelling reason to install it, because otherwise the benefits might not outweigh the costs.

"What is inevitably going to happen is that some businesses will install the wrong biometric in the wrong situation and then it is obviously going to be a financial failure. Then, in the media, it is going to be played as a biometrics failure rather than a design failure," Northrope said.

The costs of the system vary according to the capabilities you need, but they often offer a quick return on investment if used properly, according to John Trader, vice president of communication for M2sys Technology, an Atlanta-based biometrics manufacturer.

Why Biometrics

Biometric technology shines in a few niche applications right now. Northrope points to places like gyms, pools, school cafeterias, and other places with captive audiences, repeat customers, and places that people may be likely to not have a card or wallet on them.

But one key to ensuring customer buy-in for biometrics is to provide the customer, and not just the business, a benefit to using the technology.

"Our observations are that when a business is transparent about why they are using biometrics, clear on what the benefits are, and explain the back-end technology functionality properly, customers are more than willing to opt in," Trader said.

Trader said some of the key benefits to the business using biometrics is that it offers a concrete audit trail at the point of sale with irrefutable evidence of the transaction history. It also offers a strong level of security, and can eliminate the cost of handling plastic loyalty cards.

Biometrics can also reduce time-intensive IT requests for password resets by taking the place of a password. And if the biometrics are used for the employees' time management, it also eliminates buddy punching, ultimately saving on payroll costs.

Future applications

The big question now is whether biometrics can move from the niche environments of pools and gyms, and into the big box retail market.

In some parts of the world, that migration is already happening. Northrope points to Africa, where biometric technologies such as fingerprint scans are used to validate financial transactions through the use of smart cards with a biometric embedded in the EMV chip. This takes the place of PIN authentication.

The financial services industry in the United States is already taking similar steps, Northrope said. For example MasterCard has already integrated facial recognition into e-commerce as a new alternative to using passwords for 3D Secure.

Moving those technologies into point of sale applications wouldn't be a large leap.

As technology costs continue to come down, palm vein and iris scans are the two most likely candidates for point of sale applications, Trader said.

But with the technology still in its infancy, there is room for many different options to emerge, Northrope said.

"There is no single device that is head and shoulders above the others yet. In the coming years, we are going to see an uptick in biometric applications at the point of sale, but there has been no game changer yet," Northrope said.

 

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