Credit Card Processing: Biometrics

How Credit Card Processing: Biometrics Works

A merchant installs a reader-type machine at his register. Customer ID data is input once only, including picture ID and payment information. The scanner reads 40 points of information on a person’s fingertip, encrypting and storing this information. This provides higher security, since no two fingerprints are alike. Once ID and payment information are input to the scanning processor, fingerprint pictures are discarded. Once a customer’s data is input, all it takes is a quick swipe of a finger to complete future transactions.

Credit card processing biometrics system manufacturers claim that these transactions are more secure than traditional credit cards, because cards are exposed to prying eyes intent on obtaining account and security codes, while fingertip data cannot be stolen.

Biometrics Makes Credit Purchases Fun

Part of the reason for the new credit card processing biometrics technology rollout is there hasn’t been any radical new methods of payment developed for credit cards for the past 20 years. Using biometrics devices offers not only convenience and speed, but customers get a sense of novelty when purchasing with just a wave of a finger. But it’s not only for purchases. Check cashing will also be faster since all the necessary data is already entered into the scanning processor, enabling the consumer to just wave a finger to cash a check.

Significantly Decreases Transaction Times

The systems can greatly decrease transaction times for credit card purchases. With traditional card purchases, processing is done by a customer swiping the card, waiting for a receipt, and then signing the receipt. This time averages around 30 seconds per transaction. With biometrics, this processing time is about five seconds. Purchases are made by merely scanning a fingertip and keying in an ID code into the processor.

Two Companies Leading The Way

One is BioPay, 1-866-324-6729, founded in 1999 and based in Herndon, VA. The company’s system involves a one-time enrollment process for consumers with both index fingers scanned while a cashier obtains required payment information from the customer's photo ID and payment source. This process takes about a minute according to Donita Prakash, BioPay’s vice president of marketing. The product is in use at Lowes stores and 150 retail business locations with 400 locations projected by the end of 2005.

Another is Pay By Touch 1-866-729-2986, headquartered in San Francisco, CA and founded in 2002. The company also claims short consumer enrollment times and convenience for both retailers and shoppers. The product is currently being used in Albertsons, Piggly Wiggly, Thriftway and Pick n' Save Metro Market retail outlets.

Credit Card Processing Biometrics Benefits To Retailers

The implications for small businesses is significant, especially fast-food outlets, restaurants, convenience stores, gas stations, grocers, markets and other retail outlets where reduced transaction times under 60-seconds translates to more customers serviced, higher sales and increased customer satisfaction.

Increased sales

Studies suggests that impulse purchases increase by 30% at checkouts using the devices. Another benefit is that biometrics offers quick age verification for alcohol, tobacco and other purchases requiring proof of age.

Reduced costs

Biometrics systems are relatively low. Processing fees are nearly 75% lower than traditional credit card purchases.

Reduced risk of fraud

This is reduced since most thieves typically don't use stolen cards for small buys. And since fingertips are attached, there is zero chance of customers running off and forgetting their cards.

Biometrics may quickly transform the way retailers does businesses, offering convenience for consumers and reduced transaction times, costs and increased sales for retailers while building customer loyalty.