Natural Security SAS hopes North America will be as receptive to its biometric payment authentication system as France is.

The company recently completed a pilot test in France, where 940 of 1,000 consumers using the biometric system from October 2012 to March 2013 reported they would continue using the technology for purchases in retail stores that offer it. Consumers initiated nearly 5,000 biometric transactions during the test period.

"We want to take what we learned through this pilot and bring it to banks and retailers in the U.S.," says Dominique Pierre, Natural Security's business development manager for North America.

The company's system features a mid-range contactless sleeve that holds the payment card and biometric data that works with a fingerprint reader at the point of sale.

Consumers register for the Natural Security products at their bank, where they have fingerprints or finger veins scanned and stored for use with the cardholder sleeve, a wireless Bluetooth device, Pierre says. The technology works with EMV chip-based smartcards or mag-stripe cards.

Getting a biometrics payment authentication system to scale has always been the biggest challenge for security vendors, says Julie Conroy, senior analyst and fraud expert with Boston-based Aite Group.

"Consumers are comfortable with the way they do things now, and it is hard to create a lasting behavior change," Conroy says.

A past effort by San Francisco-based Solidus, which called itself Pay By Touch, didn't take hold in part because consumers didn't see a biometrics system being used more widely, Conroy says. Solidus entered bankruptcy in 2007.

Consumer tests related to biometrics generally show positive results, but convincing merchants to change their systems is a different challenge, Conroy adds.

"You may have to give the merchant a significant incentive, maybe an interchange-related reduction," Conroy says.

Natural Security is banking on improved biometrics technology and the results from its test in France to help overcome past perceptions, Pierre says.

"I can't speak about what other companies promoting biometrics may have done or not done in the past," Pierre says. "I do know that it is not a technology issue any longer because biometrics was not as mature 10 years ago as it is now."

Consumers in the test spent 58.6 euros (U.S. $76) per transaction on average, which Natural Security says is 15% higher than an average card payment. Those numbers indicate that consumers trust the system as much as traditional payment methods, the company says.

After the test period, consumers were asked to choose multiple words to describe the system. Of those respondents, 61% used the word "secure," while 55% called it "fast."

Natural Security says it takes five seconds or less for a consumer to complete a transaction with the system. The consumer simply places a finger on the reader at the point of sale terminal, which in turns sends a signal to the cardholder sleeve confirming a fingerprint match. The contactless payment card in the sleeve then communicates with the terminal to initiate the transaction.

While consumers liked the idea of not having to remember PINs when using biometrics, the test did reveal some challenges for Natural Security, Pierre says.

The card had a tendency to move around inside the case in some instances, preventing the device from working properly, and some test participants were not comfortable with placing their entire finger in the reader for a vein scan, Pierre says.

"At this point, it's more of a challenge from a logistics standpoint for a vein print compared to a fingerprint," he says.
Natural Security continues to test the system in retail stores, at ATMs, online and on mobile devices, Pierre says.

"We want the system to operate as an extension of online or mobile banking, and that is something we are working on," Pierre says. "It will make it much easier than a series of ID passwords."

Natural Security continues to work with Discover Financial Services to test the biometrics system in the U.S., Pierre says.

In addition, Natural Security has set up a partnership with the Spartan Shops to test the system at San Jose University in California.

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