Wednesday, May 31, 2006

PBT Partner brought in to IBM

Retalix Joins with IBM and PBT to Help Small Retailers

DALLAS -- Retalix, a global provider of enterprise-wide software solutions for food retailers and distributors, has joined IBM's ISV Advantage Initiative, a program designed to provide independent software vendors (ISVs) with technical and marketing support to help meet the specific information technology needs of small and medium business companies.

PBT was selected for the prestigious IBM Beacon Award in the IBM Global Services Teaming Award category for Independent Software Vendors. more

Pay By Touch partnered with Retalix in September of 2005. Retalix and Pay By Touch to Deliver Seamless Biometric Payment Integration For Grocery Retailers

Retalix solutions are installed in supermarkets, convenience stores, fuel stations, and quick-service restaurants, as well as in distribution organizations serving the foodservice, grocery, convenience, and fast-moving consumer goods industries.

Enabling the Retalix InSync and Retalix Power Enterprise software portfolios on IBM's Websphere and DB2 platforms will help Retalix expand into the SMB market more quickly and effectively. The IBM Websphere and DB2 families include products that are designed and priced specifically for small and medium businesses -- easy to install and manage, scalable to grow with a business, rich in functionality, and based on open standards to allow integration with existing software and hardware platforms.

"The simplicity and scalability of IBM's middleware software suite complement our solutions and suit our customers' needs," said Victor Hamilton, president and CEO of Retalix USA Inc. "Customers will benefit from all of the upfront enablement that we have done to streamline the deployment of our software on IBM middleware products."

"Medium-sized retail and distribution providers are increasingly looking for solutions that can improve operations and reduce costs," said Buell Duncan, general manager, ISV and developer relations at IBM. "Retalix's industry-leading applications coupled with IBM's open and integrated middleware platforms provide a total solution for institutions who want to increase efficiencies and better utilize existing IT operations to help retailers manage essential supply chain operations more effectively."

Retalix will also work closely with IBM to expand its visibility in target vertical industries through various co-marketing and sales activities.

For a complete list of PBT Strategic Partners, click here.

Tuesday, May 30, 2006

Biometrics Devices Become Increasingly Prevalent

Biometric devices gain a foothold in consumer products

SAN FRANCISCO (MarketWatch) -- Imagine that running your index finger over a sensor embedded in your computer logs you on, and then swiping the same sensor with your middle finger opens your Word program and your ring finger gets you into Excel. Sound futuristic? It's not. It's just one way fingerprint scanners embedded in computers today work to protect data and reduce the need to remember multiple passwords: Your fingerprints become a password manager, and a designated keystroke.

U.S. consumers are increasingly likely to run across such devices that use biometrics -- biological characteristics such as fingerprints, faces, irises and other means to authenticate someone's identity. From the supermarket to the cell phone, biometric products are making inroads as an alternative to the variety of passwords and PINs consumers use today.


In some grocery-store check-out lanes, customers who've preregistered their fingerprint can simply swipe their finger to have their grocery bill deducted from their checking account. You don't need to bring your wallet, nor remember your loyalty card. Pay By Touch, maker of fingerprint scanners used by grocery-store chains including Piggly Wiggly in the South and Albertson's Jewel-Osco stores in the Midwest, says it has 2.3 million people enrolled in various fingerprint-authentication programs.

Hewlett-Packard Co. says it now offers fingerprint scanners in 80% of the laptop computers it aims at the business market.

In Japan, customers at some automated-teller machines place their hand in a scanner for access to their accounts.

Five million cell phones in Japan and Korea are embedded with fingerprint sensors to restrict access to the photos, e-mails and address books stored there, said Jim Burke, a vice president at Melbourne, Fla.-based AuthenTec, maker of those 5 million scanners plus others used in computers and other devices. That cell-phone technology will be available in cell phones in the U.S. in 2007, Burke estimates.

The recent growth at AuthenTec suggests biometric technology is moving forward. From its founding in 1998 through 2003, AuthenTec sold one million sensors. In 2005, it sold three million. This year, the company estimates it'll top six million, Burke said.

Same goes for Pay By Touch. In the beginning of 2006, their biometric payment devices were in just 120 stores nationwide. They now have installations in thousands of locations and contracts that put them in 10,000 stores by years end. In addition, they have launched on on-line version of it's payment system which is designed to work with all the aforementioned biometric devices.

Pay By Touch doesn't store fingerprint images, but a numerical represent-ation of that image. That means a fraudster who hacks into a vendor's fingerprint database would find groups of numbers which are unreadable by a fingerprint scanner. The risk is that the thief then figures out a way to bypass the reader, and feed the numerical representation directly into the computer, thus fooling it into approving access.

That's an unlikely situation, industry experts said, and standards recommended by the International Biometric Industry Association call for a type of security layer that prevents that situation, said Hamilton, the IBIA chairman.

Still, the thought of scanning a body part often stops criminals cold, Williams said. Usually, fraudsters "won't want to provide that fingerprint. That's one reason why biometrics is a great deterrent. As soon as [that crime is connected] to their physical person, it becomes undeniably tied to them.

Sunday, May 28, 2006

Motely Fool on MasterCard IPO

Rich Smith of Motley Fool weighs in with his analysis of MasterCard's IPO and prospects.

...favorite quote from this article: "unless, of course, you're still using a checkbook -- which is, like, so 20th century."

MasterCard (NYSE: MA), the world's second-largest credit card brand, has joined No. 3 American Express (NYSE: AXP) on the public markets. Thursday, MasterCard became the second-largest IPO ever, floating 61.5 million shares on the New York Stock Exchange at an offering price of $39. Why $39? IPO lead managers Goldman Sachs (NYSE: GS), Citigroup (NYSE: C), JPMorgan Chase (NYSE: JPM), and HSBC (NYSE: HBC) lowballed the offering price at the 11th hour, dropping it from its expected $40 to $43 range to give the new stock some room to "pop."

And pop it did. As of this writing, MasterCard shares are changing hands at $45 and change. The 15% rise in price isn't just a function of the IPO handlers' fiddling, however. MasterCard is arguably one of the best kinds of investments to own, and it's little wonder that investors are clamoring for a piece of the company.

Here's why

Forty years old and still growing strong, MasterCard rules one-third of the triumvirate of card payment systems through which trillions of dollars of purchases flow every year. For convenience-loving consumers who would rather their pockets not jingle-jangle-jingle as they do their holiday shopping, credit card operators like MasterCard act as "tollbooths." These are the kinds of businesses that master investor Warren Buffett, to name one, loves to invest in himself -- legalized monopolies that get to sit around and collect a fee for everything that happens on their watch. You want to buy that Tiffany pendant? Think that pink flamingo would add just the right touch to your front yard? Then you have to pay the piper, and if not in cash and coin, then in plastic (unless, of course, you're still using a checkbook -- which is, like, so 20th century).

And how much do you pay? In a recent statement on the European Union's ongoing investigation into the "outrageous" profits of MasterCard and its brethren, European Competition Commissioner Neelie Kroes estimated the size of the European credit market at $1.6 trillion. Here in the U.S., the Federal Reserve says we funneled $2.3 trillion in payments through card providers in 2004. According to Kroes, credit card systems like MasterCard are taking an average of 2.5% of those massive capital flows as their "cut" for facilitating the payment process. For its part, MasterCard claimed a total of $1.7 trillion worth of those capital flows in 2005, amounting to a little less than one-third of total "gross dollar volume" charged to cards worldwide.

So clearly, this is a great business to own. But to steal a line from Bob Barker: Is the price right?That's the $64,000 question, isn't it? Unfortunately, although it's patently obvious that MasterCard, the business, is a great investment, it's not easy for the individual investor to get a good read on whether MasterCard, the stock, is priced to move. With the IPO just hours old, the major providers of financial data don't yet have up-to-date metrics posted for the stock, which would help investors decide whether MasterCard, the stock, is right for their portfolios.

Fortunately, "The Motley Fool is investors writing for investors." And because the MasterCard offering is one that I've developed an interest in, that's just what I'm going to do in the next few paragraphs. So let's get to it.

Here's what we know. MasterCard sold 61.5 million Class A shares on Thursday, and with the offering already looking successful, it's likely the underwriters will exercise their overallotment option and bring the total number of shares issued to 66.1 million. According to the firm's 424(b)(4) filing with the Securities and Exchange Commission, the 61.5 million Class A shares will constitute 46% of the firm's total equity (and 83% of total voting rights). Once the overallotment is exercised (or after a follow-on offering takes place, in the unlikely event that the overallotment is not exercised), the 66.1 million shares outstanding will constitute 49% of equity (and 83% of voting rights).

Before you pull out your calculators and get to figuring a value for the company as a whole, though, let me share the good news that MasterCard made calculating its market cap a breeze by reserving 13.5 million of its Class A shares for donation to The MasterCard Foundation, a private charitable foundation incorporated in Canada. According to the SEC filing, these 13.5 million shares constitute an even 10% of equity. Multiply 13.5 million by 10 to figure out the total equity and you've got 135 million shares outstanding after the IPO. (As for the remaining shares, 60 million Class B shares will still be owned by MasterCard's "principal members," its customers.)

Thus, what we're looking at now is a firm valued at $6.1 billion based on 135 million total shares trading for $44 each. Or that is the value that will be assigned to it once the various financial data providers get a handle on all the math, which should happen in a day or so.

Now we've got something to work withSo let's get to figuring some ratios, shall we?
P/EAccording to the Fool's data provider, Capital IQ, MasterCard earned $300.2 million in net profits over the last four quarters. Divide $5.9 billion by that and you've got the firm trading at a trailing P/E of a little more than 20.

Cash profitsFor those who are less than enthralled with accounting profits, we can also figure the firm's cash profits, or free cash flow. Over the last four quarters, MasterCard generated $327.7 million in operating cash flow. Subtract from that its $43.3 million in capital expenditures and you're left with $284.3 million in trailing free cash flow.

Enterprise value At last report, MasterCard had $1.3 billion in cash and equivalents and short-term marketable securities on its balance sheet. It also had $230 million in long-term debt. Subtract the latter from the former, then subtract the result from the firm's market cap, and this business is valued at:

$6.1 billion - $1.3 billion + $0.2 billion = $5 billion in enterprise value.

EV/FCFWhich accordingly lets us put the firm's enterprise value-to-free cash flow ratio at roughly 18. GrowthReferring back to Capital IQ, I see that over the last five years (using the firm's fiscal 2005 numbers as a starting point), MasterCard has grown its revenue at a compounded rate of 15% per annum, and its net profits at 18%. More recently, however, growth has been slowing. For example, year over year, revenue grew only 13% against fiscal 2004 and profits were up only 12%.

Free cash flow has been pretty lumpy over the last five years, doubling from 2001 to 2002, halving from 2002 to 2003, tripling from 2003 to 2004, and falling 27% from 2004 to 2005. Overall, however, the trend has been for free cash flow to compound at a bit less than the rate of revenue growth: roughly 14% per annum.

Foolish takeaway

So here, for what it's worth, is my initial take on MasterCard: Based on both historical profits growth and historical free cash flow growth, the stock looks overvalued, but not egregiously so. Divide the company's 20 P/E by the 18% growth rate at which the company has been compounding net profits over the last five years and MasterCard looks almost perfectly valued at a PEG of 1.1. Divide its 18 EV/FCF by the 14% rate of free cash flow growth, and the result is a nearly identical 1.3 ratio.

So at today's price, is the stock a steal? No. But is it fairly priced? Pretty much, yeah, especially if MasterCard can continue growing its free cash flow and accounting profits at least at historical levels. Personally, between its superb business model, the ever-growing credit card market, and the stock's reasonable price, I'd have no hesitation buying MasterCard at today's levels.

Not so fast, Rich. According to the Fool's ironclad disclosure policy, you cannot buy shares in any company you've written about, until you've first waited 10 days. Rules is rules, you know. Fool contributor Rich Smith does not own shares of MasterCard as of the time of publication, and won't be owning them for at least 10 days more. JPMorgan Chase is an Income Investor recommendation.

Friday, May 26, 2006

Article on PBT's SmartShop

Biometric Solution Adds Personalized Loyalty Program

June 2006 Written by: Laurie Pasquerell

Green Hills is a family-owned supermarket in Syracuse, NY. Its managers take great pride in pioneering new technology in this one-store operation. In fact, it was one of the first supermarkets to deploy loyalty cards, having done so in 1993.

Green Hills CEO Gary Hawkins achieved significant gains in margin and customer retention with the loyalty program by collecting and analyzing data and using it to personalize the store’s marketing. As a result, he began consulting and advising other retailers (and other industry executives) on how to accomplish this.

Accordingly, Hawkins started a consulting company called Hawkins Strategic, through which he consults for retailers and manufacturers, including global consumer goods manufacturers. Hawkins often uses the Green Hills supermarket as a laboratory, where he experiments with new marketing strategies.

“Two years ago, Pay By Touch contacted me to see if I was interested in pursuing using biometrics to enhance the loyalty program at Green Hills,” says Hawkins. “After significant research, we decided to deploy a payment and loyalty program, called SmartShop, powered by Pay By Touch, at our store.

SmartShop is accessed by customers using their fingers, so the loyalty program is distinguishable by individual and by household, and discounts are provided that way as well.”

“Existing customers who choose to continue participation in Green Hills’ loyalty program enroll in the SmartShop program by creating a new identification code through Pay By Touch,” says Hawkins. “Customers can enroll in just the loyalty program or the loyalty program combined with an automated wallet of payment methods. The system accepts any payment method customers choose — any type and any number of credit cards or ACH [automatic clearing house] transactions.” Customers can enroll while visiting the store or the store Web site, in which case the customers’ finger images are linked to their account information during their next visit to the store.

Finger Provides Access To Coupons, Rewards, Payment Methods

When using SmartShop, customers receive store offers through a store kiosk (by placing fingers on a sensor to access their personalized accounts), e-mail, or a pre-established, personalized Web page.

The account also provides access to an online grocery list, the weekly store advertisement, and personalized advertisements. Household members can create grocery lists through the store’s Web site that can be accessed later and printed in the store by another member of the household to complete the necessary shopping.

Upon checkout, the shopper places a finger over the sensor to redeem personal and public sales discounts. Payment options also are accessed in this manner, as are store rewards, such as free merchandise, and other store promotions. Historical purchase information is made available to the Pay By Touch system. A library of possible personalized offers (currently 150 offers per week) is available. These are compared to each shopper’s purchase history, and 20 personalized offers are presented to each customer each week. This number may increase; it was selected initially because it fit nicely on an 8½-by-11-inch piece of paper.

The program was deployed in mid-April of this year, so statistical results are not yet available. Green Hills’ employees had been using the solution for a few months prior to going public. Since the program was made available to the public, many shoppers have signed up for at least the loyalty program.

Furthermore, the first week SmartShop was available to the public, Green Hills completed 10% of all sales transactions biometrically. “We are hoping we can eventually phase out our existing loyalty cards,” says Hawkins. “We plan to continue with our weekly ad flyers; however, we are sure that we can continue to generate cost savings by making the distribution of the ad flyers more efficient over time.”

For More Information on Pay By Touch, Go to

Audio Interview on PBT Online

Inside Innovators:
Pay By Touch – Pointing the Way
April 10th 2006 [4:16]

Biometrics have long been the stuff of science fiction – and now they’re reality. Pay By Touch has been giving patrons of myriad supermarkets throughout the country the opportunity to pay for their groceries using a finger. While expanding their brick & mortar presence, this company recently announced products that give e-commerce a biometric boost. In this episode I speak with Pay By Touch's Jon Siegel about how he defines innovation. To listen to the interview click here.

Editors Note: In the interview, JS is introduced as the CEO of PBT, whereas in reality, the PBT CEO is John Rogers. Jon Siegel heads up Pay by Touch Online.

Wednesday, May 24, 2006

Open Letter to Privacy Advocates

I read a lot on the web about how biometrics are privacy invasive. So I thought I'd address the "chicken littles" of the world and show them that when it comes to biometrics, the sky is the limit, and it's not going to be falling anytime soon. Here are the facts:

Misplaced fears impede biometric adoption There are many myths and misconceptions surrounding the use of biometric fingerprint authentication. Why? People are apprehensive about biometrics and fear that biometric fingerprint readers are not secure.

The fact is that people had misplaced fears about using ATM's, yet usage, once consumers understood convenience and speed, took off.

Ironically, now ATM's in Latin America are being equipped with biometric sensors. I'll give you one guess who owns the patent for biometric ATM transactions in the USA. The same company that bought Indivos...

People were also wary about making purchases on the on the web, yet online purchases swelled to $176 BILLION in 2005. And guess who owns the patent for biometric internet transactions?

So, while biometric adoption has been impeded to some degree, it's not because there's a "beam me up Scottie" problem...instead, it's all about "unfamiliarity." As consumers become more aware about the benefits of biometric security, there's no doubt that it will be accepted for what it is...a more secure way to protect your digital information.

And wheras, online sales were less than $1 billion in 1996, biometrics have surpassed that benchmark already. (Online sales are projected to be $211.4 billion in 2006 vs. $176.4 billion in 2005) Online Sales to Grow 20 Percent This Year [USA Today - 5/22/06]

I've read so many blog posts and mainstream news media articles about how biometrics "can be fooled." The fact is people are under the false impression that biometric fingerprint readers can be fooled by fake fingers, or that the technology takes too long to implement and use. But the truth is, biometrics is still a more reliable and secure means than password protection, and for financial transactions interms of ensuring the security and privacy of digital assets.

While passwords are still the most pervasive tool used to secure today’s organizations, they are also the weakest link when it comes to securing corporate assets. Too often passwords are lost or shared between employees resulting in increased network vulnerability and internal fraud. In addition, as the number of passwords per employee increases, the likelihood of them being forgotten also rises, resulting in increased IT help desk calls.

In addition, checks are simply former blank pieces of paper filled in with all your pertinent financial information, right down to the name of the bank and your account number. Credit and Debit cards only have 12-16 numbers, whereas a Pay by Touch algorithym is 300 digits long, and protected with a 7 digit PIN number.

So let’s debunk the myths and misconceptions right here, right now; and get rid of the apprehension about biometrics. Here's seven popular misconceptions:

1. One of the most common misconceptions is that fake fingers can easily fool a fingerprint authentication system. However, with currently-available technology, the optical reader scans the fingerprint and uses an algorithm that can detect three dimensional structures so photocopies, transparencies or latent images of a fingerprint will not be accepted as valid. Moreover, today's biometric sensors incorporate military level security (can you say Pentagon) which includes the capacity to measure temperature and pulse.

2. People fear that companies are storing fingerprint images. Enterprise authentication applications do not store an actual fingerprint image, but rather identify data points on the finger to create a stream of ones and zeros that is a unique representation of the fingerprint. Pay By Touch never shares this information with ANY retailer, and the data is securely stored in IBM data centers.

3. People often make the assumption that someone out there has the same fingerprint they do, when in fact the chances of it happening are extremely slim. It’s estimated that the chance of two people, including twins, having exactly the same fingerprint is less than one-in-a-billion. So equivocate that to less than a 1 in billion chance of becoming a victim of identity theft.

4. There is concern around how biometrics addresses people who don’t have fingerprints. Truth be told, there is a rare skin disorder that affects very few people in which they don’t have an identifiable fingerprint. They will simply have to write checks or continue using their Visa and MasterCard.

5. Organizations are often hesitant to deploy biometrics because of the concern short lifespan of the reader itself. In general, fingerprint sensors are designed in mind to last as long as the user’s PC lifecycle.

6. Some believe that utilizing biometrics does not allow for multiple users, or that it simply takes too long. Indeed, multiple users can be authenticated on one terminal or computer in a shared computing environment, and it takes just a few hundredths of a second (in our case) to acquire, process, and verify a fingerprint once it has been scanned.

7. Often people think that a PIN is more secure than a fingerprint system. Not true. A 4-digit PIN code has only 10,000 combinations allowing a hacker to easily cycle through these possibilities. Whereas a reliable fingerprint system, such as from Pay by Touch, having 1/100,000 (0.00001%) false acceptance rate requires the hacker to present 100,000 unique touches to break the system.

So as you can see, despite these myths, fingerprint authentication avoids many of the security issues associated with passwords and tokens and is less susceptible to human error.

Fingerprints cannot be "guessed," shared or written down and users don’t have to think up a "strong" fingerprint, so the security of the metric doesn’t depend on human effort. People cannot forget their fingerprints like they do cards, checks, purses, even passwords, which helps to eliminate IT help desk calls.

Because biometric technologies use a physical characteristic instead of something to be remembered or carried around, they are convenient for users and less susceptible to misuse than other authentication measures.

So all you privacy advocates, let me ask you a you really think biometrics are privacy invasive? Ask a reluctant welfare participant if they enjoy pulling out their EBT card for all to see, or if they prefer to pay by finger, in which case "nobody" knows their method of payment. Do a little homework and you'll conclude that biometric payments are less privacy invasive than any other payment instrument.

Java Script

Thursday, May 18, 2006

Use Pay By Touch at Woodstock...Jewel

Grocery bill becomes touchy subject

May 17, 2006 3:03 PM CT

No more fumbling in your purse for your checkbook, digging in your wallet for a credit card or wondering if you brought enough cash for your purchase, just Pay By Touch, and you're transaction is complete.

Pay By Touch, headquartered in San Francisco, is a privately held company that uses biometric authentication technology to identify customers through a finger scan. Biometrics is an automated method of recognizing a person based on a physiological or behavioral characteristic.

These methods can include; retinal scanning, hand and finger geometry, fingerprints, voice patterns and facial recognition.

"So far, it's been very popular. It's another payment option," said Donna Smith, the front-end manager at the Jewel-Osco in Woodstock. The store installed the Pay By Touch system six weeks ago, Smith said.

John Rogers, founder, chairman and chief executive officer, began Pay By Touch in 2002 and works with more than 300 employees who have expertise in biometrics, security, banking, health care and business development.

Pilot programs can be found in local stores like Jewel Food Stores. Pay By Touch programs are offered at over 120,000 stores throughout Illinois, Washington, Oregon, South Carolina, North Carolina, North Dakota, Georgia, Wisconsin, Minnesota, Iowa, Virginia, New York and Ohio.
Customers must be at least 18 years old with a valid checking account to enroll in the program.

To enroll in Pay By Touch, customers simply touch their index finger to a touch pad. The system does not use fingerprints, but instead uses tiny measurements of your finger. These measurements can not be reverse-engineered into a fingerprint. After your finger is scanned, your name, address, phone number, age and checking account or debit card information is added into the system. Additional information includes either a driver's license and state or military identification. Information is never sold and is encrypted and stored at a secure IBM data center.

The Pay By Touch system in Jewel-Osco is located at all of their registers including self check-out lanes. Once a customer places a finger on the touch pad, that person is identified by finger measurements. Touch pad users are then linked to the IBM database that holds their personal information and financial accounts. They enter their telephone number or search number and verify the purchase amount. There is also an option to request cash back which can be up to $100, and any preferred savings are automatically deducted.

Mike Ray, assistant store director of Woodstock Jewel, said Pay By Touch "speeds up the check-out process. It's another reason to shop here; it's the convenience." "Checks don't need to be validated, and you don't have to wait for people to make out a check," he said.

Banks do not charge a fee for using Pay By Touch, and the money is withdrawn at the point of purchase. Customers can access their transactions at

Marry Hidding, Woodstock, enrolled in the program two weeks ago.

"It's very convenient. I really like it," she said. "There's less to do when you go to the check out. You don't have to fumble through your purse to look for a check, to get your wallet or pull out your money. There's less of a hassle."

"My mother loves it because she doesn't have to carry anything with her anymore. She doesn't have to fumble for her Jewel card or her check," Smith said. "You don't need anything but your finger."

Fast Phil's gets Faster Fills

Fast Phil's Convenience Store Chain in Spartanburg to Offer Finger Scan Payments
Retailer Embraces Leading Biometric Payment System to Offer Faster, Safer Transactions for Customers

Last Update: 8:01 AM ET May 18, 2006 - MarketWatch

SPARTANBURG, S.C., May 18, 2006 /PRNewswire via COMTEX/ -- Fast Phil's customers can now conveniently and securely pay for gas and snacks with the touch of a finger at all 11 Fast Phil's locations throughout the Spartanburg, South Carolina area.

"The system debits a shopper's checking account just like writing a check or using a debit card, but without having to hassle with wallets, cards, PINs, paper or checks," said Ben Willard, Vice President of Fast Phil's. "Because account numbers are not exposed, the finger-scan technology is helping us provide our customers with faster checkouts and more secure transactions."

The new finger scan service is powered by biometric payments leader Pay By Touch, which recently acquired BioPay and owns and operates the BioPay-branded biometric payment network throughout the country.

As an introductory offer, customers who enroll in the new finger scan service will receive a large coffee or fountain drink and a Nestle candy bar, plus they will receive a 2 cent discount on each gallon of gas purchased. Signing up is free, takes just a couple of minutes at the Fast Phil's stores, or online at, and consists of simply providing identification, checking account information, and a finger scan. Once signed up, customers can immediately make purchases with the touch of a finger at any Fast Phil's location.

Besides convenience, finger-scan payments provide the ultimate security. No one -- not even the store associate -- sees the checking account number, or the payment method used to make purchases. Customer information is securely stored and never sold.

"Paying with the touch of a finger is a win-win for consumers and merchants," said John Rogers, founder, chairman, and CEO of Pay By Touch. "Shoppers can conveniently and securely make purchases with the confidence that their personal information remains secure before, during, and after the transaction."

About Pay By Touch

Pay By Touch is the global leader of biometric authentication, personalized rewards, and payment solutions. The company's patented biometric products and services enable shoppers to conveniently and securely access personal accounts using a finger scan to identify themselves, make purchases, cash checks, and earn rewards. To date, Pay By Touch services over 154,000 retail clients, and has more than 2.5 million shoppers using biometric authentication products and services at 2,000+ locations coast to coast. Founded in 2002, Pay By Touch is a privately held company headquartered in San Francisco that employs more than 600 professionals and holds more than two- dozen U.S. issued patents. For additional company information, visit

About Fast Phil's of SC, Inc.

Fast Phil's of SC, Inc. operates 11 convenience stores in Spartanburg, Union and Chester counties in upstate South Carolina. The company was incorporated in 1981 and employs around 100 people. All eleven stores sell gasoline, branded either BP or Pure and three of the stores feature Quick Chick's fried chicken restaurants on the premises and three stores offer touch-free car wash service. For more information about Fast Phil's contact them at their headquarters location: 2024 Howard Street, Spartanburg, South Carolina 29304.

Fast Phil's Locations
2050 South Pine Street Spartanburg SC 29302
691 North Pine Street Spartanburg SC 29302
8700 Asheville Hwy Spartanburg SC 29316
12020 Asheville Hwy Inman SC 29349
620 East Wadehampton Greer SC 29651
1505 John B White Blvd Spartanburg SC 29303
304 North Main St Woodruff SC 29388
1475 Fernwood - Glendale Spartanburg SC 29307
400 South Main Street Jonesville SC 29353
1315 Lockhart Hwy Union SC 29379
18 Lancaster Road Chester SC 29706

Friday, May 12, 2006


So I was working on my proposal for a future Pay By Touch Stored-Value Check Cashing/Bill Paying Card and it dawned on me that we would need a good name for it. So I started thinking about what a good name might be. It would obviously be ideal for the "name" to have both branding power and market segment appeal.

I concluded that since this particular card would be specifically targeting "unbanked" and "underbanked Hispanics, so it was crucial to use a name that they understood and recognized as positive. At the same time it needed to have appeal and apply to the product itself. According to a report by the Federal Reserve Bank of Chicago, many hispanics have negative perceptions about financial insitutions, and everyone agrees that
building trust is a critical first step. Therefore I was faced with the additional challenge of coming up with a name that instilled trust as well (tambien)

o I played around with the English to Spanish Dictionary and entered "credit" because helping them build credit is the fundamental underlying impetus behind my proposed program. These were the results:

English - "credit"
Spanish - credito, bonificar, haber, bancos

My attention immediately focused on bonificar. So I did a reverse search and here are some of the Spanish to English Translation results...

Spanish to English

Bonficar - take into account, credit
Bonificar - refund,
discount reimburse
Bonificar - to give a bonus to
Bonificar - ameliorate, receive a premium, to improve,
Bonificar - act of goodness, reclamation, to make better, bonafide

Sounded like a translations with a lot of positive words, words that instill loyalty, trust, and desire to participate.

Because my proposal:

* results in a "discount" on their check cashing fees
* "gives them a bonus" (as they vest 3 months at a time for credit rewards)
* "reimburses"
them for their loyalty with credit rewards
* allows them to "re-fund" their stored value card with every payroll check
* Provides opportunity to "receive a premium" of credit rewards
* Affords us "bonfide" head start on helping secure the unbanked sector

The naming of the card seemed now seemed obvious (almost too easy) as everything seemingly fell into place. All I needed to do was just add a "d" at the end of bonificar and we've got:

I took the liberty to reserve "" for Pay By Touch to use should they decide to embark on a quest to help improve the process of building trust and reaching out to both the unbanked and underbanked hispanic marketplace. Click the picture entitled "The Industry" and it will enlarge and you can read that although banks are doing their best, success has remains elusive.

One of the problems with prepaid cards is the regulatory environment, especially state to state. However, the regulatory environment is largely supportive of bank efforts to attract immigrant customers.

The pictures come from a 107 page report that came out Wednesday from the Federal Reserve Bank of Chicago entitled:

Financial Access for Immigrants - Lessons from Diverse Perspectives.

I'm in the midst of poring it over but based on what I've put together thus far, the merits of my proposal seem to be strengthening, which of course is better than the alternative.

The Discover/Pay By Touch "BonifiCard" is a reloadable check cashing card that doubles as an ATM and Debit card while building credit rewards. It requires them to make at least one bill payment per month with it.

To read the entire prepaid proposal click the link: Discover the Prepaid Touch

P.S: I also reserved to use as a marketing platform for the non-hispanic unbanked or those who don't currently qualify for a credit card... (are they called non-credibles?)

CBS in Chicago on PBT - Pay For Groceries Without Cash, Check Or Charge

Click the Link above to see an article with video of consumers using Pay by Touch in Chicago.

Tuesday, May 9, 2006

How an Ad got PBT into the United Kingdom

Yesterday I received the May issue of Chain Store Age. Inside was an interesting article regarding how Pay by Touch cracked the U.K. market. Interestingly enough, it had nothing to do with biometric transactions, but instead, problems they were having with self-checkout and how age verification for alcohol and tobbaco products rendered self-checkout useless. The intriguing part is that when a local trade magazine wrote an article on their problems, it just so happened, that Pay By Touch has a print advertisement on the adjacent page. The result was a direct connection from Wisconsin to the United Kingdom.

Here's the article:

"The path to biometrics at Midcounties Co-Op, a grocer with 150 stores in the United Kingdom, led directly through the chain's self-checkout aisles.

That's where the U.K. grocer was experiencing a challenge in some of its college-town locations, where young shoppers were requiring store staff to intervene in their self-checkout transactions involving age-sensitive items, such as tobacco and alcohol.

We thought that if we could "invent" a biometric cash register, each time a student used the self-checkout, our system would not require intervention," said Bill Laird, who was COO of Midcouties.

It turned out that when a local trade magazine ran the story on the self-checkout age verification problems, as fate would have it, an ad for Pay By Touch appeared on the adjacent page....causing both companies to try to reach each other, said Laird.

After a visit to the United States to see the Pay By Touch system work in Wisconsin, Laird returned to the United Kingdom excited about the potential for not only age verification, but payments as well.

Ironically, the collaboration led not to biometrics at the self-checkout lane, but rather to biometrics-based payment at the regular lanes. Self-checkout biometrics is on the drawing board for phase two of the test, he said.

One side benefit to the rollout of biometrics..."media exposure." "We estimate 44 million people were exposed to the media coverage," Laird said about the March rollout. "It was so intense, we had to draft more people to come into the stores and meet with the media."

Editors Note: NCR, which manufactures the most widely used self checkout stations, partnered with Pay By Touch because age verification was a major issue with self-checkout. The NCR FastLane (see picture) is now manufactured from scratch with PBT technology built in...along with some kiosks they've collaborated on. Grocers like Tesco, the "Wal*Mart" of Europe already use NCR FastLane to the tune of about 2 million transactions per week. Home Depot also uses NCR FastLane, so the self checkout vertical, already big in Europe, and getting bigger in the U.S. is wisely being targeted by PBT.

Friday, May 5, 2006

Biometrics Winning Favour Around Globe

Biometrics wins favour from the lazy
By Michael Crawford, Computerworld Today Australia

Users worldwide are starting to accept biometrics out of laziness. The desire for an easy life is over-riding privacy concerns, according to a global survey.

There has been a five percent increase in people who favour the use of biometrics as a preferred method of identity verification, according to a survey of 1661 people worldwide by Unisys. Some 10 percent of individuals in the Asia-Pacific region would even prefer a chip implanted in their body.

Convenience, according to 83 percent of respondents, was the main reason for using biometrics and three quarters (75%) said speedy verification is the main driver for biometric adoption, despite concerns from some privacy activists, and some security experts who believe biometric systems may be less secure.

North American had the highest support for biometrics (71 percent) followed by Europe (69 percent). The Asia-Pacific region including Korea, Taiwan and Japan had approval from 68 percent of respondents.

Terry Hartmann, Unisys' director of secure identification and biometrics, said the research is revealing because privacy advocates question biometric adoption due to privacy concerns, yet the majority of the public seem to prefer it.

"Despite some geographical and cultural differences with certain specifics of the technologies, overall as more and more people learn about biometrics, convenience seems to outweigh other concerns," Hartmann said.

Systems developers and owners must address those concerns so that these technologies can move towards the mainstream on a large scale, with appropriate protection and sensitivity."

"A faster and less frustrating security procedure, like using biometrics, would offer less resistance," Turner said.

Pay by Touch System Touted in UK

According to Fair Investment Company, Bristol, England:

A new system being introduced on the continent and slowly being piloted in the UK called Pay by Touch is set to take off soon, according to one industry commentator.

The scheme involves using fingerscans, rather than the old signiture or PIN method, as a means of security when paying for goods and services with your credit card. Tom Fischer, the vice president of Pay by Touch Europe, the governing body in charge of promoting and advertising the benefits of the new system, says the scheme would revolutionise the way people use their credit cards, particularly regarding security issues."

You don't have to carry any sensitive information," he asserted."With Pay by Touch I'm not carrying all that personal info. I have literally everything I need at my fingertips." Some "big brother" issues are being thrown out by privacy group. Advocates of Pay by Touch have said that such concerns are part and parcel of the introduction of any new technology and that any fears could be allayed through a comprehensive public relations drive. However, critics fear that any PR exercises will blinker the public into accepting the new Big Brother-esque system without question and would blur the lines between security and control. My take is that any payment system which removes financial information printed on cheques and eliminates the use of cards with numbers would enhance privacy, not invade it.

Fair Investment Company was launched in 2000 and is a leading independent UK personal finance portal authorized and regulated by the Financial Services Authority (FSA).

Thursday, May 4, 2006

PBT Website May 5 2006

Pay by Touch Website as of May 5th 2005

Click Any Picture to Enlarge

Pocono Record - The great payment debate

Pocono Record - The great payment debate

"Ideally, Pay by Touch would address both O.S.'s concern about timeliness and Max's concern about identity theft. I would think that broad implementation of a Pay By Touch system would dramatically curb identify theft."

Tuesday, May 2, 2006

Loyalty's Gentle Touch - SmartShop

While biometric technol-ogy is slowly inching its way into the convenience class, a one-store grocery retailer has created the first of its kind payment-plus-loyalty program called SmartShop.

Powered by Pay By Touch (, SmartShop uses a finger scan not only for payment, but to access customized coupons, promotions and rewards from in-store kiosks.

Gary Hawkins, CEO of Green Hills Grocery (Syracuse, N.Y.), was one of the first supermarket retailers to launch a loyalty program in 1993. He believed for years that technology would enable retailers to offer specials different shoppers that fit their specific needs. When technology wouldn't make it up to speed, Hawkins decided to create SmartShop, his own Web-based infrastructure and communication system that allows him to create personalized specials.

When Pay By Touch heard what Hawkins was doing, it seized the opportunity to incorporate SmartShop into its biometric payment program.

"Loyalty cards are a poor way to identify your customers or to track shopping patterns," Hawkins said. "Too often, cards are shared, making it difficult to gauge what is bought for each household. I knew biometrics would be a convenient and accurate way to identify my customers."

SmartShop creates a personalized ad flyer for each shopper based on products they buy most often. Green Hills creates a library each week working with 100 to 150 items broken down to specific brands and packages sizes. The several-hundred offers run through a targeting engine and are compared against shoppers' purchase history. Each shopper gets 10 offers a week, but the company is considering bumping that up to 20 offers a week.

Shoppers access their specials by e-mail, the SmartShop Web site or one of three four-sq. ft. kiosks in the stores where, with a touch of their finger, a list of specials is printed. Identifying themselves at the check out with the biometric finger scanner automatically rolls back pricing for any specials they've purchased.

"Traditional marketing vehicles cost more each year and provide less return," said Hawkins. "Going to market on an individual shopper basis is very effective."

Since Hawkins is piloting the integrated SmartShop and Pay By Touch set up, cost was nominal, but he insists that the return on the investment is very strong.

"Cost varies by how many Pay By Touch finger scanners a store uses, and if they want to use the kiosks as well, which I recommend," Hawkins said. "You're maximinzing shopper lifetime value by creating relevant messages that increase their shopping frequency, market basket size and retention. Any one of those levers produces strong results and a quick ROI."

Related: NCR and Pay By Touch Deploy First Kiosks Together

Age Verification via Pay by Touch

From a Chicago Blog... Your finger, sir!

So, I was at Jewel this weekend, and I “needed” to pick up a six-pack of Rolling Rock. Imagine, my surprise when I get the self-checkout, select “Pay-By-Touch“, scan the six-pack, and instead of having to fish out my driver’s license, the scanner says, “age verified via pay-by-touch”. No muss, no fuss, I paid and left….and it even said how my age was verified on the receipt (on left). Sometimes, you just gotta give it up to technology. I love this!

NCR and PBT Deploy First Kiosks

NCR powers Pay By Touch kiosk for first European finger-scan payment service
02 May 2006

NCR Corp. announced that three Midcounties Co-operative supermarkets in and around Oxford, England, are using the Pay By Touch enrollment kiosk, which features NCR EasyPoint kiosk technology and software developed by NCR in conjunction with Pay By Touch.

This is the first European deployment of Pay By Touch’s biometric payment service, which uses a simple finger-scan at the till to authorize a secure electronic transaction from a customer’s existing bank account rather than using a bank card, check or cash.

Shoppers can use Pay By Touch after a quick one-time online enrollment. The kiosks increase convenience for shoppers, allowing them to activate and maintain their Pay By Touch electronic wallets, all while at the store. Once sign-up is approved, shoppers can purchase products by simply placing their finger on a scanner at the cash register. The system then displays the individual’s electronic wallet, which contains his direct-debit and Midcounties Co-op superdividend card information. The Pay By Touch system is highly secure and customer information is never sold.

"By adopting the Pay By Touch payment service, the Midcounties Co-op is increasing payment convenience for their customers while simultaneously addressing consumers’ increasing concerns about the growing identity theft issue," said John Rogers, founder, chairman and chief executive of Pay By Touch.

To watch a video report on NCR and self-checkout click the MarketWatch Banner on the left.

Chicago Radio Interview

Radio Interview with Pay by Touch's
Shannon Riordan on Chicago's WGTD, 93.1 Public Radio

Biometrics: Payments at Your Fingertips

Biometrics: Payments at Your Fingertips

From BusinessWeek Online
"Fingerprints and iris scans will replace keys and credit cards if outfits like Pay By Touch succeed in their biologic mission"

Biometric Slideshow


Let Your Fingers Do the Paying

: Pay By Touch
Measures: Fingerprints (actually scans finger for 40 of 1000 data points)
Status: Available in grocery stores as well as a soon though an as-yet-undisclosed, major online e-tailer
Sample customers: Supervalu, Albertson's, Piggly Wiggly, IGA. Used by several retailers and has contracts to be in over 10,000 stores by year's end.

Pay By Touch just may be the most prominent biometric device in the U.S.

Overview: Shoppers enrolled in the program can speed through checkout lines, paying for items with a linked bank account or credit card simply by applying a fingerprint to a sensor. Pay By Touch says more than 2.5 million people have signed up. Now the company plans to expand into online retail, using sensors available on some laptops

BusinessWeek: Behold The Body Biometric

Behold the Body Biometric

Before long, we may use fingerprints, iris scans, and voice recognition to log onto computers, buy groceries -- even when picking up kids from school

Slide Show >> This could be you: At a convenience store, a scanner reads your fingerprints and deducts the price of a coffee and doughnut from your checking account. Once at the office, your employer uses software to monitor the rhythm of your typing or a Webcam to measure the proportions of your face before letting you onto the network. Your call to customer service won't go through until you're identified by the cadence of your voice. Later, at an ATM, a sensor measures the blood flowing through your palm before permitting a withdrawal. When you go inside to approve a transfer, your signature on an electronic tablet gets similar treatment. Picking up the kids at school, a digital camera photographs your iris to confirm its unique pattern. After getting home and unwinding, you log on to buy some concert tickets and pay, again, with your fingerprint, this time on a sensor built into the laptop. (see Pay by Touch Online Demo here)

FAIL-SAFE IDENTIFIER . Welcome to the biometric world. In an effort to prevent identity theft and boost efficiency, companies are becoming ever more vigilant in verifying people. Biometrics essentially selects a physical or behavioral feature, say a voice, and by measuring myriad patterns contained within, creates a fail-safe identifier. It's much harder to get ahold of someone's iris or imitate their voice than it is to find their keys, password, or mother's maiden name. And biometrics is catching on. Every manner of measurement above is in use in the U.S. or will be by the end of the year in one form or another.

An industry leader, Pay By Touch, which allows people to pay with their fingerprint at certain stores, has more than 2.5 million registered users (see BW Online, 03/28/06,
"Biometrics: Payments at Your Fingertips").

No matter what they measure, biometric applications work in a similar way, translating data into an identifier for an individual. But each company crows about the advantages of its own device. SensibleVision offers face-recognition software for computers that continuously monitors a user at a given machine. Makers of non-contact devices like the iris camera and palm reader say their tools are more hygienic than, say, a fingerprint scanner.

COOLNESS FACTOR. Lyle Berkowitz, a doctor at Chicago's Northwestern Memorial Physicians Group, says patients recognize a coolness factor in face-recognition software. At the same time, it would be natural to feel uneasy about sharing such intimate information, especially since the industry remains largely unregulated. But so far, the concerns haven't spoiled the biometrics party.

Halperin is a reporter for BusinessWeek Online in New York

Monday, May 1, 2006

Pay by Touch Opens in 15 Wisconsin Stores

Wisconsin Stores Accepting
Pay by Touch

6525 S. 27th Street


1735 W. Silver Spring Dr.

7901 W. Layton Ave

7014 Green Bay Rd

709 E. Capitol Drive
4061 N. 54th Street
2355 N. 35th
123 W. Oklahoma Ave
1100 E. Garfield

New Berlin
13995 W. National Ave.

5740 Washington Ave


3850 N. 124th Street

West Allis
11111 W. Greenfield Ave