PulseWallet, a biometrics payments provider, is again touting its payment and authentication device, but it must overcome a sudden emergence of competitors that is also trying to breathe life into an idea that has had spotty success in the market.
"Biometrics has been tried many times and it's difficult to get consumers excited about it," says Todd Ablowitz, president of Colorado-based Double Diamond Group, LLC. But Apple's move to support fingerprint authentication in its iPhone 5s is giving biometrics "another run," he says.
Other companies are attempting to rekindle interest in biometric payments. Discover Financial Services began testing a biometric payment system last month in its Riverwoods, Ill., headquarters, and Optimal Payments is promoting biometrics authentication for high-risk transactions. Other vendors are targeting niches, such as tanning salons, where a fingerprint-based system might be more appealing to scantily clad clients.
But biometric payment systems have long struggled in the market. The most infamous is the 2008 shutdown of Solidus' Pay By Touch, which let shoppers access a payment account by scanning a fingerprint at the point of sale. And when the opportunity for biometrics was hottest following the Federal Financial Institutions Examination Council's 2005 mandate to beef up online banking security biometric tech was seen as too "inconvenient" compared to software-based alternatives.
PulseWallet is talking up its versatility. Its technology can be used for payments as well as for a retailer's time management, allowing employees to clock in and out with their palm.
"We are unique enough that we shouldn't have to provide plastic identifiers for authentication; we should only need ourselves to authorize payments," says Aimann Rasheed, CEO of PulseWallet.
The New Jersey-based PulseWallet started out using finger vein authentication with technology from Hitachi Ltd. In 2012 the company switched to palm vein sensors from Japanese technology provider, Fujitsu.
"Overall the [palm vein] technology is better for the application," Rasheed says. "The technology is smaller; Fujitsu is a little more than an inch all around. When it comes to retail, the space around the cashier is very important."
By comparison, Hitachi's finger vein scanners were bulky, Rasheed says.
"In the future the palm vein technology will improve in a more flexible way than the finger," he says. "Eventually you'll be able to wave your palm over the reader, but with finger vein authentication you always have to insert your finger in the device."
Consumers link a card account to PulseWallet's tech when they first use it at the point of sale. The biometric data is encrypted and stored in the cloud. For subsequent purchases, shoppers would rest a palm over the sensor and then type their phone number for authentication.
The whole PulseWallet package, which includes a cash box, receipt printer and the terminal itself which the palm sensor attaches to, will cost approximately $2,000, says Rasheed.
"Biometric technology has a significant opportunity to become a solid form factor of security," says David Schropfer, head of mobile commerce at The Luciano Group. However, even biometric data can be compromised in a security breach.
"When I was notified that Target was breached, I simply ordered a new credit card with a new number," Schropfer says. "What would I do if I was notified that my palm-print data was breached? Based on PulseWallet's current model, I'd either hope the bad guys didn't also get my mobile number, or change my mobile phone number, a significant inconvenience."
While biometrics can be an expensive endeavor, the price of point of sale terminal packages has been decreasing over the past several years with the onslaught of tablet-based systems costing only a few hundred dollars.
PulseWallet will launch a closed beta in February with several retailers near Clifton, N.J., says Rasheed. Currently a couple of local pharmacies, one grocery store and a café have signed up for the beta test, he says.
The company then plans on launching to the general public in the spring.
"I struggle to see how [PulseWallet] is going to make it," Ablowitz says.
Solidus' failed Pay By Touch system "didn't turn into a big production system that scaled," Ablowitz says. "People are reticent to this and there are a lot of technology costs, both big hurdles."