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No wallet required
: Fingerprints may
replace plastic, cash
By Francine Brevetti Business Writer, Oakland Tribune from http://www.oaklandtribune.com/default.asp?puid=480&spuid=480&indx=943023 Oakland, CA - June 26, 2001 - OAKLAND'S VERISTAR is facing a crucial summer test, actually five tests, to see if its long-researched technology will persuade retailers and fast-food chains to jump to processing fingerprints as identification. The field known as biometrics -- identifying people through their physical features, whether their irises, voiceprints or fingerprints -- has been around for years but has not really taken off among retailers. Since certain body characteristics are unique, it is argued that the best way to establish your identity is by using them instead of a personal identification number that you can forget or a plastic card or account number that can be stolen or lost. "We're the first to take finger imaging to the consumer space in general. You can identify yourself to the scanner just as you use credit cards and checks. For the retailer, the economics of not having to handle pieces of paper or plastic are pretty compelling," said Veristar president and chief executive officer Philip J. Gioia. Now Veristar, formerly Smart Touch of Berkeley, is seeing five large retailers and chains put its system of linking fingerprints to payment systems through its paces in pilot programs around the country. Though Gioia won't name the specific companies involved, they include a fast-food company in Sacramento; a large supermarket chain in New York and New Jersey; a large "boutique market" in Seattle; an electronic discounter in the Southeast; and a regional multimillion dollar supermarket in St. Louis. Veristar's technology -- backed by 19 patents -- links the body information to payment systems. It has partners with hardware companies making fingerprint scanners and other devices. To enroll in the voluntary Veristar system, the consumer presses her finger on the button on a scanner that photographs her fingerprint. Veristar registers that print in its database. When the consumer goes to make a purchase, again she presses the scanner. Veristar matches her fingerprint's minutiae with those in its database. A positive match triggers her credit card company to bill her. She pays her tab without rummaging around in her purse or backpack for her wallet. "A lot of companies make scanners. A lot make software to match the print with the database. Veristar is taking it a step beyond to the full solution. They deliver the whole system," said Raj Nanavati, a partner of the research consultancy International Biometric Group. "You don't have to buy the scanner. Veristar puts the device on your counter and manages the whole process." Till recently, biometric identification has been employed mainly in government, the military and law enforcement. Of late, there's been modest incursion into banks' ATM machines and into the keyboards of some computer makers to allow users to log on. But if Veristar wants to make its product work in retail, biometrics has to be embraced by credit card companies. Visa International in Foster City has been testing the technology in its own employee cafeteria for the last three years. Chetan Pawardhan, Visa's director of strategic business development, said the fingerprint scanner in the employee cafeteria has registered over 50,000 transactions, or $200,000 in transactions for the 200 employees Visa recruited for the program since Oct. 1, 1998. He said the Veristar technology has worked "flawlessly." Ricky Sun, a test supervisor in Visa's applied research division, presses his index finger for his lunch regularly. He has been using it for a year and a half and he likes it because "I don't need my wallet or anything." But Pawardhan would not comment on Visa's possible adoption of the system for its cardholders. He said that issue is currently "under intense debate." He indicated there would be a decision in the near future. This of course is the crucial piece. Getting retailers to sign on is just one hurdle to overcome, the next is to get the banking system to endorse it. Shalini Chowdhary, an analyst with Frost & Sullivan in San Jose, said the acceptance of biometric identification in the retail sphere has been delayed by technical problems and lack of confidence within the banking and credit card community. Banks and credit card companies have not rushed to embrace this technology because they've invested hundreds of millions in the credit card system they've been operating for the last 40 years and more recently smart cards that have a microchip embedded in them. And those pieces of plastic carry the banks' logo on them whereas one's fingerprint does not. Veristar's Gioia insists that biometrics need not replace the plastic world, only supplement it. "Our tests this summer are designed to conclusively demonstrate that consumer acceptance and preference. Once that has been established, the banks will take a different view of biometrics," he predicted. ©1999-2001 by MediaNews Group, Inc. and ANG Newspapers ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ |