Monday, April 17, 2006

Chicagoland Likes Pay by Touch

Biometric Scanning at Chicagoland Jewel Osco an Effective Innovation

CHICAGO, IL – Now your finger is your checking account and debit card.

Jewel-Osco in Chicago became the largest grocery chain in the U.S. to espouse biometrics – or the statistical study of biological phenomena – as a new payment option. Said more simply, you can use your finger to pay as opposed to cash, your debit or credit card or a paper check.

Despite how you’d think the system operates, it actually does not capture and authenticate your purchase through the use of a fingerprint.

Instead, the Pay By Touch system collects miniscule measurements from your index finger and software gives each unique point a numerical value. These values are processed through a security algorithm. No fingerprint images are actually stored, according to Pay By Touch Solutions President John Morris, who asserts that this set of descriptors could not be used to regenerate a fingerprint.

While some privacy advocates might find issue with the technology and may fear the safety of personal data, the company also claims that these measurements cannot be reverse engineered to a fingerprint. All information is encrypted and stored at secure IBM data centers.

A Satisfying Experience

This reporter, who has not been fond of the self-service, touch-screen payment kiosks you now see at stores everywhere because they often don’t save time and still require employee intervention, on Tuesday tested the initial authentication and payment process at the Jewel-Osco on 3531 N. Broadway in Chicago.

While I couldn’t use the Pay By Touch system for my initial purchase because I wasn’t yet registered, registration immediately following was a breeze. A store employee was stationed by the customer service desk at a Pay By Touch kiosk, which came packed with everything it needed for fast processing. I would think stores eventually would want this process to fly without an employee.

Luckily I had all three forms of identification on me: a driver’s license, a Jewel-Osco loyalty card and a paper check, which would be voided by the registration process. Many people might not have all three, though, which could cause problems. The employee started the process by pressing her finger to the kiosk’s scanner and entering her private, seven-digit PIN.

After she was signed into the system, she began my enrollment process. I touched my right index finger to the scanner until I heard a confirmation sound and then repeated the process twice more. I then did the same with my left index finger three more times. It sometimes took a few seconds for the system to be satisfied with the scan and the employee recommended for me to swivel my finger right to left a bit.

She then inserted my driver’s license into a card scanner. It captured the driver’s license number and some additional information. My personal check was then fed through a check scanner to digitally acquire my checking account and routing number. I optionally entered my e-mail address, too, for system updates and likely promotional use. Pay By Touch promises never to sell personal information for marketing purposes.

The Pay By Touch system currently requires payment via checking account rather than a debit or card credit, which can be a negative for some people who accrue cash back and airline miles on cards. In total, my initial enrollment took about 12 minutes. At the end of the process, the kiosk did not indicate a successful enrollment and the employee had to log back into her account to verify its completion.

Once my enrollment was complete and I was handed my miniature FM radio for signing up, I made another purchase to try out the new payment method.

Back at the self-service checkout, I complete my item scanning and selected Pay By Touch as my choice of payment. I touched my finger once and it was recognized. I also entered my self-selected security PIN, which most people have as their telephone number for easy recollection. In addition to telling the system how to charge me, the finger touch also informs the system of my loyalty information for item discounts.

Consumer, Store Perks

While the technology precludes the need for shoppers to pay by cash, card or check, the method also prevents stores from having to pay banks and other middlemen to process cards and paper payments. Morris says a transaction with a traditional paper check is shuffled through seven or eight people’s hands starting with a cashier and ending with a bank.

While credit card companies typically charge retailers between 2 percent and 3 percent of a transaction, Pay By Touch charges stores about 10 cents per transaction. After five Pay By Touch purchases, consumers are sent a free fleece in the mail.

Following your first Pay By Touch use at a store, you’re able to go online and manage your
virtual wallet. The company has integrated a site within Jewel-Osco’s for consumers to manage their wallet online. Shoppers can verify their address, loyalty card and even add a credit or debit card even though that payment type is not currently being used.

The site encountered various errors while trying to validate my account – including how I typed my driver’s license number – and the site broke out of the grocery store’s interface and revealed its
true provider. Consumers can also initially register online but still must go into a store for finger scanning.

In addition to Jewel-Osco, 24 Cub Foods stores in Chicago began exploiting the technology in November 2004. Standalone Osco drugstores do not currently use the technology. In 10 months, Pay By Touch says it has grown from being installed in just 50 stores to approximately 2,100 stores today.

Reporter’s Beat: Telecom
adam@midwest.bizAOL: PureAdam11