Finger-Scan Payment Spreading in Retail

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For over 2.3 million U.S. consumers, charging retail purchases to a bank account or a credit card is now as simple as swiping their finger across a scanner. Now accessible in more than 2,000 retail locations, payment by finger-scan technology is spreading, according to a new study by the Platt Retail Institute, a retail think-tank and consulting firm based in Chicago.

Finger-scan payments leverage biometric technology, which is the process of identification by considering a unique human trait. And it is catching on as a faster and safer way to pay. Recently Jewel, a Mid-West grocery chain owned by the second largest retail grocer in the U.S., completed a store-wide launch of a finger-scan payment system at all of its 204 stores. The system works by scanning data points on a finger by way of a sensing device. For added security, an identification number is also entered at the time of transaction processing. Once the payment is authorized, the amount is then either deducted from the customer’s bank account or added to their credit-card balance.

Signing up for the service is free for consumers, who report that it is a faster, easier and more secure way to pay. For retailers, the advantages include up to 30% faster checkouts due to a decreases in “fumble-factor”, reduced fraud, and lower transaction processing costs as compared to debit card and credit cards.

In addition to payment by touch, finger-scan technology is being utilized to ensure identification when cashing checks, for use in making on-line payments, and for personalization of promotional offers, such as when a customer interacts with a kiosk. In the United Kingdom, Midcounties Co-operative, a 150 store grocer, is currently testing biometric payment in college-town Cambridge locations as a faster way to verify the age of students attempting to purchase alcohol and tobacco products.

In areas where theft and security concerns run high, the ability to go shopping and leave the credit cards and cash at home may present a compelling case for the adoption of this technology by consumers. For retailers, faster checkouts and lower transaction processing costs, with the added benefit of enhancing the customer shopping experience, should also impact the implementation of finger-scan payment.

For more information: Steven Keith Platt (skp@plattretailinstitute.org), director and research fellow, the Platt Retail Institute, Chicago, Illinois. www.plattretailinstitute.org.

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