Friday, June 30, 2006

PBT Releases Kiosk Program

Self-Service Kiosks

Do your shoppers receive “Loyalty Cards” without giving you complete enrollment information? Do you regard the “Loyalty Card” as anything more than a discount card from which any shopper can benefit?

If you are serious about rewarding good shoppers on a personalized basis to increase their level of loyalty to your stores, you must look carefully at your enrollment process.

Although Pay By Touch Personalized Marketing uses edits and sophisticated data entry tools to maximize the value of information from traditional paper-based enrollments to Reward Programs, there are inherent obstacles in such a process that keep you from successful communication with all of your loyal shoppers.

In a traditional paper process, enrollment data cannot always be checked for accuracy, completeness, or validity before a card is issued, for card-based enrollees. It often can be weeks, or longer, before store personnel submit the paper applications for data entry. There is no way you can communicate with these shoppers during this time.

SmartShop™ includes self-service kiosk enrollments that can be biometric (finger scan) or card-based. Time used by store personnel is reduced, enrollment information is automatically populated via Drivers Licence scan or real-time reverse phone append to assure accuracy, and the profile information is immediately added to your database.

Requiring only an electrical outlet, these kiosks offer ease of placement due to wireless technology. Splash screen content can display variable specials and promotions.

The kiosks offer additional revenue opportunities from manufacturer advertising, and they are centrally monitored for maintenance and performance requirements.

Each kiosk is also capable of dispensing custom printed gift cards.
Click the picture above to enlarge and read.

Thursday, June 29, 2006

PBT's Personalized Marketing Program

The purchase of Capture Resource, has been integrated into the Pay By Touch platform as their new "Personalized Marketing Divison".

Click Here to go to Website or click the picture below to enlarge and read:

Pay System at Tip of your Finger

Pay system at tip of your finger

ROCKFORD — Not much has changed in the more than 50 years that Serrano’s Mexican Restaurant has been in business in Rockford. The restaurant’s hot sauce recipe is still the same, the limited menu contains recipes as old as the restaurant itself, and it is still a family-style, family-operated endeavor.

But some traditions aren’t always as easy to accept. Even in the modern day world of electronic debit and credit cards, the North Main Street eatery takes only cash, and it’s been that way as for as long as part-owner Anita Serrano can remember. Serrano’s stopped taking checks after hassles with a bad-check writer.

“The restaurant belonged to my mother, and she was old-fashioned. She just wouldn’t do it, and you can’t make her do something she doesn’t want to,” Serrano said in between taking lunch orders. “The big benefit is that we’re paid right then and there. You don’t have a machine you have to repair or pay fees on.” Understandably, old habits are hard to break. But it may become tougher for businesses like Serrano’s to compete as fewer people use cash and new cashless payment methods make their way into more restaurants, supermarkets, gas stations and other retailers.

Cub Foods in Loves Park, for example, not only takes payment in paper and plastic, but it accepts purchases by finger. After signing up with a biometric authentication system called Pay By Touch, customers can pay with the push of their index finger. The new payment method is in line with a growing trend: More consumers are turning to electronic forms of payment over cash.

At Cub, customers must provide a voided check and some personal information and the system verifies a customer’s bank account and identity within minutes. After that, there’s no need to show ID, pull out any credit card or even provide a signature. Customers can walk in and out of a store without carrying a wallet or purse.

Cub Foods may be an extreme example, because it’s the only retailer in the Rockford area that offers Pay By Touch, according to the San Francisco-based company’s Web site. But across the country, Pay By Touch is available in more than 2,000 stores, including at least 100 Jewel supermarkets in the Chicago area.

Cash isn’t easy

Courtney Klein, 27, of Rockford, is a check-writer more than anything else. Although some may find the practice time consuming and a hassle, Klein says it’s the only way she can really track her expenses.

“I don’t like having money in my pocket because I spend it. With checks, I know I’m writing it down and I know what I’m spending. I don’t really like debit cards for whatever reason,” she said while writing a check to Big Apple Bagels in downtown Rockford, which does not accept credit or debit cards.

Others, like Mike Fortner, 46, of Rockford, only pay with a debit card, but for reasons similar to Klein’s.

“When you’re buying gas in the wintertime, it’s easier than going inside. You don’t have to stand in line for 5 or 10 minutes,” he said. “I can go without cash for a couple of days. It just keeps better records and you don’t have to keep receipts for everything.” Still, Fortner and Klein don’t fit the statistics. According to the American Bankers Association, consumers 35 and younger are more likely to pay electronically than any other age group.

A 2005 ABA study showed that 56 percent of all payments were made electronically using debit, credit and prepaid gift cards. About 33 percent of payments were made with cash and 11 percent with checks. The first time electronic payments outpaced cash was in 2003, the ABA found.

Already, consumers can charge purchases in nearly 30 million locations, according to the association. But then there are places like Serrano’s that are no-plastic establishments. Other places include Subway restaurants at 2405 Charles St. and 1120 E. State St. that take only cash and Subway gift cards, and the downtown Big Apple Bagels, which takes only cash and checks, although manager June Mackey hopes to get a credit and debit machine in soon. The no-plastic policy can slow down business, too. Serrano said that at least once a week the restaurant loses a customer who doesn’t have any cash on them.

Costly transactions

It’s not so much that these establishments don’t want to modernize. Instead, owners like Serrano are concerned about high fees associated with accepting credit and debit transactions. Big Apple Bagels’ Mackey said checks feature a 2-cent cost a transaction for the restaurant, while credit and debit transactions can cost anywhere from 15 to 50 cents a purchase. She said the cash-only method is catching on with customers, who can use the ATM in the AMCORE Bank branch next door if need be.

“I think that if the restaurant is good enough, people will go in there whether it (accepts) check, debit or credit or not. But, you do need to be flexible so you need to offer whatever the competition is offering,” Mackey said.

Other businesses owners, like Lauri Brolund of Studio Blu at the Shops of Edgebrook, said there was no question about taking credit and debit payments. Each week, the salon’s bank, Fifth Third, withdraws 3 percent of sales to cover processing fees. The bank withdraws $20 a month to cover the fee to lease the charge machine. And when she pays each of her stylists, about 3 percent of all credit and debit card transactions accrued by each stylist is taken out of their paychecks. It all adds up to a small fee for Brolund’s business, and, she says, barely any hassle.
“It’s always more important to serve the customers and take out that little 3 percent than turn someone away because they don’t have cash with them,” she said.

Jennifer Hall, a business consultant in Rockford, agreed with Brolund’s thinking. “In comparison to the amount of business you can do, it’s really not that large of a percentage of your expenses. You want the customer to utilize the business and make it as easy as possible,” she said.

And once a customer knows a merchant takes credit or debit cards, they’re not as frugal with their money, the American Bankers Association’s Tracey Mills said. “Consumers tend to spend more when they’re not limited to the cash within their pocket,” she said.

The plastic replacement?

So just as more consumers get hooked on plastic, the payment method might be met by another competitor: the finger. At the Loves Park Cub Foods, customers can place their index finger onto a screen no larger than 2 inches wide. In seconds, Pay By Touch measures the customer’s body heat, but not their fingerprint. A screen will appear with the customer’s name on it and then a seven digit secret code chosen by the customer must be entered. A screen prompts the customer to approve payment, and the transaction is completed.

Worried about security? Bernadette Simard, a store manager, said, “It measures the ridges and pressure points on your finger and it measures body heat so you can’t cut someone else’s finger off. “Even if you’re readings are similar, it’s safeguarded with a PIN number,” she said. “It’s almost hacker proof.”

But don’t expect paper and plastic to be extinct just yet. Mills said that 90 percent of consumers don’t even know about Pay By Touch or other tap-and-go payment methods popping up in retailers.Staff writer Rowena Vergara may be reached at or 815-987-1341.

The cost of using Pay By Touch

So how much does a merchant really pay to process credit and debit transactions? Stephanie Snavely, a merchant sales representative with National City Bank in Chicago, says processing fees vary with every merchant and depend on the amount of volume a store produces. But there are some basic amounts that merchants pay:

Whereas Pay By Touch charges a flat fee of .20 cents per transaction, other forms of payment cost the retailer much more:

*Interchange fee: Visa and MasterCard charge a base rate for credit and debit transactions called the interchange. Snavely estimated that 1.59 percent of each transaction goes to credit- card companies. A 15-cent authorization fee is charged to merchants per transaction as well. The credit companies then forward that money to the merchant’s processor.

*Processor’s fee: This is the fee merchants pay to the company that processes each debit and credit transaction to deposit into a merchant’s checking account. Processing companies get about 1.75 percent off each credit-card payment plus a 23-cent authorization fee. For debit payments, it costs the merchant 1.22 percent plus 28 cents for each authorization. The authorization is when the machine dials out for clearance. Advice for merchants* Have a banker analyze your monthly bank statement to help you determine what rate you can qualify for.*

Know your credit and debit card processor. Snavely said: “You’re trusting this company with thousands of dollars with this money. Know if they’re going to go out of business next month or next year and if they are depositing your money.”* To make the processing costs worthwhile, it’s best to make about $1,000 in credit and debit transactions per month. Most credit-card processors require a monthly minimum on transactions.

Monday, June 26, 2006

I4U News Thinks PBT is Awesome!

I4U News - Floridians Can Now Pay With Their Finger

Floridians Can Now Pay With Their Finger

A Tampa, Florida store has successfully installed what's being dubbed the first retail biometric payment system in the state. Coast To Coast, a local convenience store, is now allowing customers to pay via debit/checking accounts by simply scanning their fingerprint -- no PIN number, no signature, just your fingerprint.

The technology behind it comes from the relatively new company Pay By Touch, which also has retail clients in Virginia, Illinois, and North & South Carolina, hopes to gain customer acceptance by installing finger scanning payment options at places like grocery stores and gas stations.

There's a short process for customers to get their fingerprint data registered with the store, and right now it does not work for credit card transactions. Retailers are especially fond of the new format because it negates them from having to pay the regular 2-3% fee for paper check processing.I know some people get really schizophrenic about this kind of thing, but I think it's awesome. To just be able to leave my debit card at home (or to not even have a debit card) would be so ideal. I'd never have to worry about leaving my card at home and having to cancel a purchase.Full story. Via The Inquirer.

St. Petersburg Times on PBT

Business: No cash? No card? Just scan your finger

A Tampa Coast to Coast convenience store has installed a device that scans your finger to process payment through a debit account.

By MARK ALBRIGHT, Times Staff Writer

TAMPA - Customers can pay with cash, plastic or their index finger at a new Coast to Coast Family Convenience store here. Taking a big step
beyond the ease of the Mobil SpeedPass, Coast to Coast has installed what's claimed as Florida's first biometric payment system.

There are no cards or PIN numbers to remember. Just stick your finger in the scanner and be on your way.

While applications are available to process credit and store loyalty card transactions by fingerprint, this one is limited to processing only debit account transactions. "People either love it or think it's a sign of the coming apocalypse,'' said Amer Hawatmeh, owner of the new convenience store at 110 E Bearss Ave. who signed up a few hundred customers for Pay By Touch. "But to me, it's the wave of the future.''

Pay By Touch is one of several speedier payment technologies racing to build enough retailer acceptance to ace out rivals and overcome consumers' rising concerns over identity theft. It's all on the road to payment gurus' vision of a cashier-free future, in which customers just walk out the door while their transaction is automatically processed. The big credit card companies, for instance, are deploying a card reader developed by MasterCard International that picks up a radio signal to record a transaction when a card is merely tapped on or waved around a reader at the checkout stand. Other wireless systems in use in other countries use built-in payment system prompts broadcast to and from a cell phone to activate vending machines.

Pay By Touch is a closely held San Francisco startup that uses finger-scan technology to authenticate payment account holders. Backed by $130-million in venture capital money, Pay By Touch recently paid $82-million to acquire BioPay LLC, its biggest finger-scan competitor that has won a following in Europe big enough to authenticate $7-billion worth of transactions to date.

Pay By Touch now has tests under way with several convenience stores, gas stations and supermarket chains around the United States, including Harris Teeter in the Carolinas, Farm Fresh in Virginia and Jewel Osco in Chicago.

"Finger scanning is new, so we want to get people used to it by building acceptance at high-frequency, high-traffic retail locations such as gas stations and grocery stores,'' said Leslie Connelly, spokeswoman for Pay By Touch. "We're also going into places where people who don't have a banking relationship cash paychecks.''

The company is a bit puzzled by customer privacy fears. After all, they say, how can using a unique fingerprint for identification be riskier to theft than a plastic card, key chain token or account number that's tapped into a computer or spoken over the phone?

The company pledges not to sell or rent personal information, or access to it. The fingerprint image recorded is not the same as those collected by the federal government or law enforcement. It's similar to the finger-scan technology used at theme park gates. Those systems take measurements of patrons' hands and fingers and link them to a multi-day pass to prevent several people from using one person's pass.

The Pay By Touch computer records a multitude of point-to-point measurements and stores them in an encrypted form in an IBM data center. Images of both index fingers are kept in case a shopper's trigger finger is hidden by a bandage.

To create an account, you must let the store get a fix on you and your bank account by scanning in a sample check and a driver's license. You can also apply online and be assigned a PIN number. The number is keyed in the first time you buy something to link your fingerprint to the personal account information.

The shopper needs neither a card nor a PIN number after that. Just place a finger on the scanner.
Retailers are paying a minimal amount to test the system. But many retailers such as Coast to Coast are drawn to Pay By Touch because it can process debit account payments or eChecks, an Internet version of a paper check, without subjecting the store to interchange fees that cost the retailers 2 to 3 percent of the transaction.

Mark Albright can be reached at or 727 893-8252.

Saturday, June 24, 2006

ID is right at your fingertips

Tony Jones got to the counter, planted his finger on a scanner and got his cash. Fast. “No fumbling for IDs,” he explained after cashing his check at the Price Chopper at 85th Street and Wornall Road. “No waiting. I think it’s the bomb-diggity.”

More than 35,000 area customers have signed up to use fingerprint scanners since Balls Food Stores started installing them at 16 Price Chopper and Hen House locations two years ago to identify check-cashers.

The company has not cashed a single fraudulent check using the scanners, said Jerry Lutjen, director of loss prevention. The system has been so successful that Balls plans to expand the scanners to the checkout lanes soon.

Technology experts say it’s only a matter of time before people in Kansas City and across the nation will be scanning their fingers in exchange for gas and groceries, leaving their purses and wallets at home.

Store owners say they prefer the fingerprint scanners because they eliminate the possibility of fraudulent checks and often save them the cost of credit card and bank fees. For customers, it can be a fast and easy payment method — you don’t need an ID, or even a pen.

Experts in biometrics — the statistical study of biological characteristics — say that soon nearly everything, from office buildings to schools to cell phones, will use biometrics as a means of authentication.

Irises and fingerprints will be scanned, hand and facial dimensions will be digitally recorded, and a computer will tell you whether you’re you. And if you are, doors and digital accounts will be unlocked.

Not everyone is on board.

Barry Queen, owner of four area Price Choppers, said he will let other stores work the bugs out of the new system before he invests in the scanners, which can run $1,000 each. And Brett Shirk, executive director of the American Civil Liberties Union of Kansas and western Missouri, said that because biometric information is so personal — after all, it’s a part of you — it needs special government regulations that limit who has access to it. “In the absence of regulation, we’re in a position where the biometrics industry says, ‘Trust us,’ ” he said.

Yet this technology, industry experts say, is the future — and much of it is already in place.

Nine of the 10 leading computer manufacturers offer machines with built-in fingerprint sensors, mostly aimed at businesses, said Jim Burke, a vice president with AuthenTec, a Melbourne, Fla.-based company that sells the sensors. They cost about $50 extra.

And, Burke said, 5 million cell phones in Japan and Korea are equipped with the sensors, enabling only the owner to unlock it. He said phones with fingerprint sensors will be available in the United States within a year as Americans move toward storing more personal information on their phones.

Biometric sensors are also granting, and denying, people access to schools and fitness centers, said Walter Hamilton, chairman of the International Biometric Industry Association, in Washington. And they’re also replacing time cards.

Biometrics “is still in its younger days as an industry,” Hamilton said. “It’s still evolving. I think it’ll touch everyone here in the next five years or so.”

On the way

Kansas Citians could be buying goods with their fingerprints within months. Balls Food Stores plans to begin testing the scanners in its checkout lanes this fall. And HyVee will test scanners in some stores this summer, a company spokeswoman said, although the company has not decided whether to test them in Kansas City.

The scanners have already taken off in other parts of the nation. More than 2.5 million people have signed up for Pay By Touch, a San Francisco-based company, including customers at 240 grocery stores in Chicago.

Although the scanners aren’t cheap — Pay By Touch charges about $1,000 per checkout lane, including installation costs, software and customer support — one incentive for store owners is lower transaction fees.

For a $25 purchase, credit card companies usually charge from 80 to 95 cents and banks charge 35 to 40 cents for a debit card or check, said Pay By Touch marketing director Shannon Riordan.

A Pay By Touch customer who uses the company’s payment system, eCheck, costs the store 10 to 20 cents. (However, if the customer links the fingerprint to a credit or debit card, the store pays the full fees.)

Kal Abhari manages the only gas station in Missouri with Pay By Touch scanners, an Express Mart south of St. Louis. He said his station saves $300 to $500 a month in transaction fees.

The machines work similarly to credit card machines with no need to sign or show ID. Users scan their index fingers. The system also requires a 10-digit PIN — usually a phone number — to identify the user. In addition, the federal agency in charge of airport security is scheduled to implement a “Registered Traveler” program this month in which people who sign up can bypass security checks with a “smart card” containing their fingerprints. A Kansas City International Airport spokesman said the airport doesn’t plan to participate, but Kansas Citians could encounter the program at other airports.

Security concerns

Proponents of biometric technology say it’s far more secure than traditional means of verification.

But Shirk of the ACLU said the nation is rushing too quickly into biometrics, with people giving up their personal data before thinking about who has it and what they can do with it. “Technology is expanding with lightning speed, and the law isn’t keeping up with it,” he said. “There are no legal controls over whether that information can be sold. Can it be turned over to law enforcement without a warrant?” Hamilton of the International Biometric Industry Association said his organization urges biometric companies not to share personal information without the consent of the customer. And computers usually store only pieces of useful information about the scanned image, Hamilton said, not the actual image.

“I’m not sure what you’d be able to do with it,” Hamilton said. “You couldn’t recreate a photograph or picture of the eye or a pattern of my fingerprint.”

Thursday, June 22, 2006

Innovative C-Store Brand Implements PBT

Innovative Florida C-Store Brand Implements Biometric Technology

Seven weeks ago, Coast to Coast president Amer Hawatmeh opened the doors of his new c-store that features the latest and greatest in retail technology, which includes Pay By Touch's BioPay biometric payment technology, where customers scan their fingerprint to complete payment.

The store has had more than 250 people sign up for the service since its opening, Hawatmah told CSNews Online, and the device links a person's checking account to their fingerprint. The technology charges a flat fee for its use, rather than a percentage like credit and debit payments, and the cost saving option "made all the sense in the world," said Hawatmah.

The store features signage and displays that inform customers of the technology and the kiosk used to sign up for the service is also prominently featured in the store, Hawatmeh explained.He heard about the finger scan technology in November of 2005 and after doing extensive research, decided this was the technology he needed. Hawatmeh, a 35-year industry veteran, has also spent time in the restaurant industry. He has combined those two industries into a store concept and brought in the best technology to create his new store, he reported to CSNews Online.

He is always looking for the next thing for his stores, and recalled a time when he was the first to get the ExxonMobil Speedpass technology when he was with Wawa.The 4,800-square-foot store that Hawatmeh calls a "family convenience center," sits on a two acre lot, has full gas and diesel stations, and a "sharper image look," including African mahogany accents, a coffee bar that could compete with Starbucks, an 85-foot full service conveyor, and a deli that's "out of this world," he said. The store also has a car wash capable of serving 120 cars an hour. Coast to Coast has three more c-stores in the works and, if successful, will go nationwide. "The concept is to expand as far as we can go. It's coast to coast," said Hawatmeh.

Tampa Bay Video of PBT Opening

Temple Terrace, Florida — Convenience stores are all about getting in and out quickly. That’s why a little device at one Bay Area gas station is attracting so much attention.

Amir Hawatmeh, Coast to Coast Convenience Store Owner:
“You’re writing us a check, without writing us a check, using your finger print.”

It’s called
Pay By Touch and utilizes the latest in biometric technology. Customers sign up with their driver’s license, checking account information, and finger print.

Amir Hawatmeh, Coast to Coast Convenience Store Owner: “We scan both fingers in, both your right and left fingers in. God forbid you burn your finer on one, we’ve got the other one.”

From there a simple touch is all it takes to pay. The customer is automatically identified and the total deducted just like a check or debit card purchase.

Every person’s print is unique. The scanning device is so advanced it even checks the finger for body temperature and pulse.

Amir Hawatmeh, Coast to Coast Convenience Store Owner:
“If somebody God forbid chops it off… they can’t come in with a cold finger. It’s not going to work.”

Some customers are skeptical of the new Pay By Touch technology. Leslie Rotureau, Store Customer: “As you know, as soon as they come up with this technology, someone will find out a way to beat it.”

But for others, it’s an amazing idea. Chuck Justice, Store Customer:

“It’s a nice easy way, convenient to get in and get out.” About 250 customers have signed up at this
first Florida location. The company hopes to soon install scanners at other grocery, gas and convenience stores across the area.

Wednesday, June 21, 2006

PIN Debit for the Internet is BIG for PBT


Merchants that use PIN-prompting convert up to 90% of their debit card and credit card transactions to PIN transactions, according to a June study by the Mercator Advisory Group.

“It is highly effective in steering consumer choice,” of card uses, Ken Paterson, principal analyst at Mercator, tells CardLine’s sister publication, ATM&Debit News. “It is probably 80% to 90% effective.”

PIN prompting typically refers to merchants steering customers at the point of sale to use their debit cards and PINs instead of signature debit cards or credit cards.

Mercator estimates that merchants who adopt PIN prompting can save about $8.5 million annually per 100 million transactions.

Mercator estimates the interchange fee for a PIN-debit transaction is about 20 cents less than a signature debit transaction. Paterson says the largest “big-box” retail chains, such as Wal-Mart and Best Buy, as well as relatively high-ticket merchant chains are increasingly prompting customers to use their PINs instead of signing for transactions.

PIN prompting has not penetrated smaller merchants and is unlikely to become commonplace at such segments as fast-food restaurants that depend on quick checkouts, he says.

Identity Theft Reduced by PBT

NewswiseThe cumulative losses from identity theft, now suffered by tens of millions of individuals and businesses worldwide, rose from an estimated $221 billion in 2003 to an almost unfathomable $2 trillion in 2005, according to data from the Aberdeen Group, Boston.

Clearly, it is far too easy to steal personal information these days--especially credit card numbers, which are involved in more than 67 percent of identity theft, according to a U.S. Federal Trade Commission study. It's also relatively easy to fake someone's signature or guess a password; thieves can often just look on the back of an ATM card, where some 30 percent of people actually write down their personal identification number and give a thief all that's needed to raid the account.

But what if all we had to do was present our fingers to a scanner to authenticate our identities before completing a transaction? The biometric authentication system would raise the technological bar beyond the reach of most identity thieves.

The sensors, processors, and software needed to make secure credit cards that authenticate users on the basis of their physical, or biometric, attributes are already on the market. But so far, the credit card industry hasn't seen fit to integrate even basic fingerprint sensing technology with their enormous IT systems.

If credit card issuers don't act soon, customers, many of whom are becoming increasingly comfortable with biometric technologies, might just force the issue.

In the United States, millions of people at hundreds of supermarkets have already given the thumbs-up to services offered by BioPay LLC, Herndon, Va., and Pay By Touch, San Francisco, which let shoppers pay for their groceries by pressing their fingers on a sensor mounted near the cash register--no card necessary.

Millions more have fingerprint sensors built into their cellphones to act as locks, and into their laptops to replace text-based log-ins. All of this activity translates to 29 percent annual growth for a worldwide biometrics market that's expected to reach $3.4 billion in 2007. And that market will greatly expand if and when credit card companies get serious about combating ID theft.

Monday, June 19, 2006

New Fla. Retailer Offers Finger-Scan Payment

New Fla. Retailer Offers Finger-Scan Payment

PBT Signs Up Coast to Coast

New Florida Retailer Is First in Tampa to Offer Finger Scan Payments - MarketWatch:

"New Florida Retailer Is First in Tampa to Offer Finger Scan Payments

New Coast to Coast Family Convenience Store Embraces Leading Biometric Payment System to Offer Faster, Safer Transactions for Customers

ET Jun 19, 2006

TAMPA, Fla., June 19, 2006 /PRNewswire via COMTEX/ -- Florida residents can now conveniently and securely pay for groceries, takeout foods, car wash, and gasoline with the touch of a finger at a new retail location in Tampa. The service is the first finger-scan payment system in the state of Florida.

'Coast to Coast's unique convenience center concept, located at the corner of Florida and Bearss Avenue, is a great fit for incorporating biometric payments, and we are excited to be the first Tampa retailer to give our customers the convenience and security of paying with the touch of a finger,' said Amer Hawatmeh, president of Coast to Coast. '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. Because account numbers are not exposed, the 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(TM), which recently acquired BioPay and owns and operates the BioPay-branded biometric payment network throughout the country.

As an introductory offer, customers who enroll to use the BioPay-branded service at Coast to Coast will receive a free car wash with their gas purchase. On subsequent visits, "

Friday, June 16, 2006

Internet PIN Debit - ATM Direct FAQ's

Frequently Asked Questions

What is PIN-Debit?

PIN-Debit is the card your bank issued to you, usually with a checking account, that you use to withdraw cash from ATMs or in conjunction with purchases at the point-of-sale. It is also known as an "ATM card" or "debit card". PIN-Debit is one of the most secure forms of payment because the Personal Identification Number (PIN) is known only to you and providing or entering it when making a transaction proves that it is you using your debit card.

What is my PIN?

Your PIN is a four- or six-digit Personal Identification Number that is issued to you by your bank, or selected by you either during or after receiving a card. Your PIN is a secret number that is known only to you. Since it is known only to you, and is very difficult to guess (it could take thousands of tries to guess a 4-digit PIN, and most systems would suspend the account or alert the account-holder after 3 unsuccessful tries) the PIN offers substantive protection with a minimum of effort or inconvenience.

As a rule, you should never share your PIN number with anyone else-even family members. You should never put your PIN into an email or letter or respond to anyone asking you for it. If you feel that someone else might know your PIN, you should work with your bank or credit union to get it changed at your earliest convenience.

What is Internet PIN-Debit?

ATM Direct delivers a suite of highly sophisticated security mechanisms to protect the PIN, identify the user and input device and ensure the uniqueness of the transaction. These mechanisms enable you to make purchases at participating e-commerce merchants in a safe, secure and completely private manner. You can now purchase on the Internet using PIN-Debit just like you can at many brick-and-mortar stores.

In fact, because he PIN provides assurance that it is you using your card and no one else, it is safer than any other type of transaction and helps prevent fraud.

How does PIN-Debit protect me?

When you correctly enter your PIN during a purchase at a participating online merchant, you confirm that you are the authorized cardholder and associated both with the device interacting with the merchant's website and the transaction for which a payment authorization is being requested. The PIN is entered into a secure, constantly-moving PINpad window and passed to ATM Direct for verification (called authentication). Once authenticated, the request for payment authorization is relayed via the Electronic Funds Transfer networks (e.g., STAR, Pulse, NYCE, Accel/Exchange to the card issuer for a check and hold on funds for the amount requested. If an incorrect PIN is entered for the card account by the user, the purchase will not be completed (and the user will be directed to try another method of payment..

How secure is Internet PIN-debit?

Internet PIN-Debit by ATM Direct meets or exceeds industry standards for security for PIN-Debit processing. ATM Direct has been audited and certified by EFT networks and by third-party EFT security experts. ATM Direct uses the most advanced authentication, encryption and security technologies in the industry to secure your computer, transaction and account.

Why should I use Internet PIN-Debit?

Many online shoppers are uncomfortable using their signature-based credit and debit cards online because-after all-signatures were made for face-to-face use in physical locations. Still other consumers don't have access to these cards or sufficient credit lines, to shop with them online. But most consumers know that PIN-secured debit cards are the safest means of transacting. So Internet PIN-Debit provides extra protection for you for when you are shopping online. No one knows your PIN but you!

Internet PIN-Debit is just as easy as using your PIN-debit card at a brick-and-mortar retail store such as your local supermarket or drugstore. The only difference is that Internet PIN-debit can be used at participating online e-commerce merchants. So consumers now have the ability to control on a pay-as-you-go basis the use and timing of when their funds can effect a purchase; no bills or interest charges down the road, no surprise NSFs (from overdrawing from accounts with signature-debit cards) and

Will I need to apply for a new card or PIN to use Internet PIN-debit?

No, Internet PIN-Debit uses the bank-issued debit-card and PIN you already have.

I am not a computer expert. How easy is it to use Internet PIN-Debit?

Internet PIN-Debit is quick and easy to use. Nothing changes on the merchant's online store site or the merchant's purchase process. When you go through checkout at a participating online store, and present a valid Debit or ATM card our Internet PIN-Debit PIN-pad will activate to allow you to securely select your PIN number.

The process secures your personal computer and then display’s a PINpad. This PINpad "floats" around the PC or mobile device screen, and presents the numbers in a randomized order for each of the four digits entered, using your mouse to click on the correct digits, instead of your keyboard. This mechanism frustrates most malware programs, such as "keyboard sniffers" or viruses that try to steal private information such as log-in credentials. Once you have entered your PIN (usually 4 digits) and selected "Continue" in the accompanying box, your information is securely sent to us (and not the merchant). We request an authorization from the issuer of the card, and that decision is passed back to the merchant.

Can I get a separate card and PIN for everyone in my family or can I get a special card and PIN for the Internet if I want to?

Sure, just contact any participating bank or credit union. You can find out whether your bank or credit union participates either on the ATM Direct or participating Electronic Funds Transfer network (e.g., STAR, Pulse, NYCE, Accel/Exchange, etc.) websites, your financial institution's website, or by just entering in your 16-digit Primary Account Number (PAN) after clicking the ATM Debit payment method option. If your current FI is not participating, please let them know you would like your card enabled for Internet PIN-debit!

Can I use Internet PIN-debit from any computer?

You can use Internet PIN-Debit from any of your personal computers if the browser supports 128-bit encryption. This may be at home, at work or on your lap-top when you travel. We do not allow Internet PIN-debit from public computers. You should never enter any personal information, bank account information or credit card information on a public personal computer that you do not know whether it is secure or not.

We use special software to be sure that your computer is secure and safe to use. Once you download our software and personalize your PIN-pad, you simply shop as you usually do. We do not use pop-ups so you can still use your existing anti-virus, firewall and pop-up blockers like you always do. We only support personal computers running Microsoft Windows at this time.

Can I use more than one debit card?

Yes, you can use any or all of your debit cards with their PINs as long as the bank or credit union that issued them is participating in Internet PIN-Debit. There are no additional steps to take to use additional cards.

I have a pop-up blocker on my computer. Will Internet PIN-debit still work for me?

Yes, Internet PIN-Debit is not affected by pop-up blockers.

I have a virus checker with a firewall installed. Will Internet PIN-debit still work for me?

Yes, but you are likely to get a notice the first time the software accesses the internet, simply "Grant" access to insure successful operation.

How can I change my PIN?

Contact your bank or credit union; they issued your card and have the facilities to change a PIN.

When will the money be taken out of my account?

Most financial institutions put a hold on and/or take the money out of your account immediately. In some cases, funds may be taken out later that same day.

What if I do not have enough money in my account?

If your transaction is declined from your bank for insufficient funds, the merchant will give you an opportunity to use another account or card to complete the transaction.

Are there any minimum and maximum payment amounts?

These floors and ceilings are set by the financial institution that issues your card..

Security Alert - E-mail hoaxes, Phishing and Pharming

Fraudsters use a variety of techniques to collect banking account information from consumers. You should always be on your guard against fraudulent emails and websites that might ask you for confidential information like your card and PIN number.
We will never contact you via email and ask you to supply us with any financial data like your credit card details, or your PIN. If you think you've received a fraudulent email, or directed to a fraudulent website, please let us know, forward the details to

I'm concerned I may have provided my personal details on a hoax e-mail, what should I do?

Call your bank or credit union immediately. Check your statements carefully for any fraudulent activity on your card, and report any suspicious activity as soon as possible to your bank or credit union.

How do you change or update my software?

If we need to update our software on your machine, we will automatically update it the next time you use it.

How much does it cost me to get it and to use it?

Internet PIN-Debit costs you, the consumer, nothing to obtain and use this software. It's free!

If I have additional questions about Internet PIN-Debit, who can I contact?

Please contact us at .

Credit Card Fees Show No Mercy

DES MOINES – As credit card fees rise with the cost of gasoline, c-stores are struggling to keep their heads above water. Some, like the Eastown Amoco in Des Moines, tread water for as long as they can, but have succumbed to the high fees and have been forced to close their pumps.
Jim Krueger, owner of the Eastown Amoco, told The Des Moines Register "Credit card fees can eat you alive." Those high fees, and a decline in profits, have made him shut down the pumps and only serve as a towing service. "I reached age 61, and I decided I am not taking money out of my retirement fund to offset my gasoline business," he said.

Other stores in the area, while they remain open, aren't faring so well either. Urbandale, Iowa-based ShortStop is a six store chain owned by Dave Carpenter.

According to Carpenter, roughly 70 percent of customers pay with credit cards at ShortStop. Last year, he told The Des Moines Register, one of his truck stops paid $650,000 in credit card fees. "We've always had good times and bad times in this industry. Now we're in a bad void, and nobody knows what to do about it," he said.

"Credit card fees are the biggest issue in the convenience store industry right now. It's the fastest-growing expense behind labor and rent," said Jeff Lenard, director of communications for the National Association of Convenience Stores to The Des Moines Register.

Gas stations pay 3 cents per transaction for credit card purchases. NACS estimated that stores paid $5.3 billion in gas-related credit card purchases last year, while industry profits totaled $5.8 billion.

Casey's General stores saw credit card fees increase 39 percent for fiscal year 2006 as reported by The Des Moines Register, even though they installed debit card payment at the pumps to decrease the fees,

"It's a big number that is eating into our overall gross profit," said CFO Bill Walljasper.Don Rhodes, policy manager for payments and technology for the American Bankers Association suggests eliminating credit card payment options an alternative to high credit fees. "It's not unheard of," he said.

Thursday, June 15, 2006

UBS 4th Annual Electronic Payments Summit

UBS held its fourth annual Electronic Payments Summit in New York on June 14, hosted by its senior Computer Services & IT Consulting analyst, Adam Frisch. The conference featured a surprising focus on privately-held companies of various stripes, from early stage innovators like Pay by Touch, to well-established merchant acquirers to Visa USA. I was able to listen in via a podcast.

Merchants in ISO-lation

I'm always gratified to see a panel on the acquiring business, particularly one focused on growing in the small business market. A panel consisting of several ISOs, including John Morris, the President of Pay By Touch, and Pam Joseph, CEO of Nova, covered a variety of issues in the merchant processing space.

A good deal of the discussion centered on the 800-pound gorilla that was not in the room, First Data, and how it might be increasing its focus on smaller merchants under the new leadership of Ed Labry. It was thoughtfully pointed out by Ms. Joseph that FDC has always been relatively active in that end of the market through its bank alliances. It will be interesting to see how these bank partners respond if they perceive increased competition from FDC’s owned portfolio at the lower end of the market.

Given the maturity of the market, it’s clear that acquirers and ISOs are increasingly specializing in specific verticals in order to maintain defensible positions and are also looking to ancillary services (check processing, gift cards, etc.) to help maintain revenue growth in a highly competitive environment.

On the processing side, Steve Erickson of EVO Merchant Services observed that ISO relationships with back-end processors will tend to be less sticky than those with front-end processors noting that “any time you touch the front-end, you need to plan for 20% merchant attrition.”

Prepaid Pay-Off

A short panel on prepaid cards spoke initially to a level of disappointment with the growth of card-to-card remittance solutions. It is clear that while the rewards in the money transfer business can be great, that business poses the largest number of regulatory and logistical challenges in the prepaid space. Panelists believed more immediate opportunity was available in healthcare and unbanked applications.

We continue to observe that the winners in this space tend to be processors rather than the issuers or distributors of prepaid cards. Perhaps more time is needed to fully develop value-added applications like money transfer, but in the meantime we’ll continue to bet on the guys selling the shovels rather than the miners.

(Even) Newer Payment Systems

Since the industry has been talking about mobile payments for several weeks already, the next panel focused on truly new payment systems and two panelists presented contrasting approaches to the market.

Net Spend focuses on a specific consumer segment with the lofty objective of “delivering economic citizenship to the unbanked”. They appear to be enjoying success in penetrating this market and are beginning to introduce a suite of products that expands beyond a basic prepaid payment card (savings, overdraft lines, mobile phones). Still, a look at their fee levels serves as a reminder that economic citizenship comes at a cost.

Gratis Card is a stealthy company approaching the space mainly from a merchant perspective, somewhat in the mode of Debitman. They represent a relatively radical and potentially disruptive player seeking to capitalize on the movement against interchange and working to create new accounts and funding mechanisms with a set of non-traditional banks/funding sources. As with Debitman, we’ll be looking closely for the development of a consumer value proposition sufficiently compelling to drive the desired behavior change.

We Didn’t Start the Fire

The lunch session featured a ‘fireside chat’ between Mr. Frisch and Elizabeth Buse, EVP of Product Management at Visa USA. Within the constraints imposed by her attorneys, I felt Ms. Buse made a solid case for the continued success of Visa in the US:

With respect to the MasterCard IPO, she reminded the audience that Visa competes with MasterCard’s product set not its capital structure and has done so with great success for the past several years. She suggested that the audience look to instances of issuers switching their card brand loyalty for evidence of which network is winning.

She explained how the recent change in Visa USA’s governance would have minimal impact on the process of setting interchange rates. Management will continue to suggest interchange revisions twice each year, but the recommendation will now need to be ratified by a Board committee comprised only of outside directors.

Asked about Bank of America’s threat to create its own payment network, Ms. Buse questioned whether such a significant investment could provide an adequate return to the company, especially in view of the “huge execution risk” it would entail.

She said that Visa would continue to selectively enter processing businesses (as it did with Visa Debit Processing), but only when needed to support the growth of branded payment volume. While she does not expect member support payments to increase in the future due to the MasterCard IPO, she did acknowledge that Visa’s profit margin in 1Q06 was restrained by the resigning of business agreements with some large issuers (along with higher legal costs).

In response to a question about how Visa had taken share from MasterCard in the US in recent years, Elizabeth responded that if she had to pick one thing, it would the execution of the Visa Signature card program, a product targeted to affluent consumers and conceived mainly to compete with American Express. She pointed out that Signature cards must carry a common set of benefits while leaving room beyond that for issuers to customize rewards. By contrast, bank-issued American Express cards do not currently offer the benefit package that American Express advertises for its proprietary cards (principally the very popular Membership Rewards program).

While Visa Signature carries a premium level of interchange (which is what was needed to keep issuers from defecting to American Express), she pointed out that they have balanced the value proposition for merchants by creating the Visa Incentive Network, a facility that helps Visa merchants target offers to these affluent consumers. According to Ms. Buse, payment volume on Signature cards rose 20% last year, versus 10% for consumer credit cards overall.

Finally, Elizabeth noted the biggest worry for the growth of Visa is not MasterCard, American Express, the ACH, or any other payment system; it is the continued confidence of consumers and merchants in the security of the system, which has obviously been shaken by recent breaches. She noted that this is a high priority at Visa and is being working mainly in conjunction with the acquiring community. Well said!Fine China

A panel on growth opportunities for processors in Asia reached the unremarkable conclusion that there are some, most especially in China. It appears that the main constraint on card growth in China is a limited acceptance network and the hope remains that preparations for the 2008 Summer Olympics in Beijing will address that issue.

While the nearly one billion bankcards in circulation in China make it a processor’s paradise, the issuing business may be a more restrained opportunity, given the dominance of debit cards and different cultural attitudes toward spending and borrowing. In a later panel, Jack Stephenson of McKinsey noted that annual credit card profits should reach $1.5 billion by the end of the decade, versus the roughly $30 billion in US credit card profits last year. Oh well, on to India.

Keep This Private

A panel of distinguished private equity investors shared their perspectives on investing in payments. In general, they appreciate the relative predictability of companies in this sector, though they find fewer opportunities to “overhaul” payment companies. Colin Roche of GTCR noted that many payment companies are characterized by high fixed costs and network effects, which means they must achieve scale in order to become cash-flow positive, an important requirement for his investments.

Panelists expressed their interest in areas such as emerging payment types, merchant acquiring, payday lending, and fraud detection/prevention. They were almost uniformly negative on the recent trend of “clubbing” wherein several private equity firms join together to accomplish a large deal (e.g., the recent Sungard buyout), citing among other things the potential loss of concentrated, quick decision-making and a dilution of the ability to add value in non-monetary ways.

Let’s Network

The day’s final panel covered issues surrounding the changes in payments networks in recent years. It’s amazing to me to think that only one major payment network (Visa) is controlled by a consortium of banks anymore!

The panel reached no strong consensus on whether MasterCard’s new ownership structure actually provides better liability protection to banks than does Visa’s governance structure. According to Wachovia’s Lorraine Fischer, it depends on who your lawyer is.

Panelists agreed that in the short-term, competition among card brands would continue to be focused on product innovation and facilitating the secular shift to electronic payments. Over time, MasterCard’s new structure could drive changes in management incentives and corporate risk appetite that might take the company in new direction according to Dr. David Evans, though it’s hard to predict the direction of such changes right now. Dr. Evans offered that new kinds of combinations would likely emerge, musing that a combination between MasterCard and Citigroup is probably less likely than a combination between MasterCard and Google.

In the near-term, it is possible that the most important trend is not governance changes but the massive consolidation of members/customers. As we’ve seen with Bank of America, large issuers can now make ever more credible threats to the status quo operation of the card networks, probably altering network behavior in the process. Clearly, large issuers find the networks’ traditional services less relevant at their current scale and will likely press the networks toward being more commodity providers of connectivity.

In discussing the emergence of new payment systems, McKinsey’s Jack Stephenson noted that most new payment schemes do not succeed, and those that do are typically extensions of existing systems with a new value proposition attached (think PayPal). The panel agreed that the current controversy around interchange probably creates additional impetus for innovative payment systems, but Dr. Evans wisely cautioned that successful innovations must provide real value-added and not simply capitalize on current imperfections in the interchange system.

The panel talked openly about whether interchange would even exist in a few years (naturally, no firm conclusions).
* * *

All in, a very interesting and useful day. Kudos to UBS and Adam Frisch for assembling a stimulating set of speakers and topics.

From Payment News from Glenbrook Partners

Friday, June 9, 2006

Suddenly Pay by Touch is Everywhere

Suddenly Pay by Touch is Everywhere

To read the article, you need Adobe Acrobat Reader, click the link above to access.

If you don't have Acrobat Reader, you can simply click the pictures to enlarge and read this two page article from Digital Transactions Magazine.

Page Two

"PBT" - A Biometric "Behemoth"

Biometric Authentication Gains Momentum


Mercator Advisory Group research shows that the market for all forms of biometrics from fingerprint scanning to voice verification is growing and anticipates that the global revenues for biometrics will approach $7 billion by 2010. This report examines the role of biometrics in payments both as a single source of authentication or as an additional authentication factor.

"Biometric technology will continue to grow in adoption as an authentication technique," states Melanie Broad, Analyst in Mercator Advisory Group's Emerging Technologies Service and author of this report. "Implementations of biometrics across the board have been slow but steady and are starting to pick up pace. Biometrics will have an important role to play in the future as the technology continues to be used as a second form of authentication for online authentication, ATMs, and in devices such as PCs, laptops and cellular phones."

The report looks at the market opportunities for biometric authentication with regards to payments and reviews the various biometric scanning technologies available. Biometric adoption is forecasted out to 2010 with consideration given to different biometric technologies. The report also examines the different adoption paths of contactless terminals and biometric readers at the point of sale.

Both the market for single factor biometric authentication and multi-factor biometric authentication are examined with an eye to the challenges and opportunities the market segments will face. Among other hurdles, the problem of distribution is discussed on both the merchant and consumer side.

The report identifies current implementations and technologies including a look many of the stakeholders in the competitive landscape. These stakeholders include biometric vendors and terminal manufacturers embedding biometric features into their POS devices.

The biometric behemoth in this arena is Silicon Valley's
Pay by Touch, based in San Francisco. Having already strategically partnered with all the major terminal manufacturers they own more than two dozen patents and have another 70+ patents pending in regards to biometric transactional methodology. Their main competitor, BioPay, was purchased by Pay by Touch in December of 2005, leaving only much smaller outfits, like Biometric Access, which has not had any major developments since early 2005, and no issued patents, as future competitors.

Hitech Tills Gets 88% of Thumbs Up

Hitech Tills Gets Thumbs Up
(from Oxford Mail)

Mark Dawson tries out the new payment method at the Co-Op in Headington, UK.

88% of UK's surveyed welcome the PBT Biometric System...

Thursday, June 8, 2006

Another Grocer Rolls Out PBT

East Coast Grocer, Pathmark to Roll Out Pay By Touch

Pathmark, which operates 141 Grocery Stores on the East Coast, will introduce Pay By Touch finger-touch payment service in four of its supermarkets, before rolling it out to other units.

Pathmark did not say which stores will introduce the payment technology. "Paying by touch is really as simple as it sounds," noted Pathmark c.e.o. John Standley in a statement. "Pay By Touch provides our shoppers with a fast, convenient, and secure payment option. It's just one more way Pathmark is dedicated to helping our busy shoppers.

"Pathmark customers will be able to use Pay By Touch after a one-time sign-up at in-store kiosks, or online at To enroll, a shopper must provide photo ID, a voided check, and a finger to be scanned. According to Pay By Touch, customer information is never sold or disclosed.Once they're signed up, customers can immediately use the service to buy items at participating Pathmark stores, or at any other retail store in the United States that is part of the Pay By Touch network. Other retailers offering Pay By Touch include Albertsons, Cub Foods, Piggly Wiggly, Farm Fresh, Thriftway, bigg's, Green Hills, Harris Teeter, and Sunflower Market. At the point of sale, shoppers place a finger on a scanner and enter their phone number. After the shopper is recognized by name, and the transaction amount is OK'd, payment is automatically debited from his or her checking account. No account numbers are exposed at the point of sale.

Pathmark operates 141 supermarkets in the New York-New Jersey and Philadelphia metropolitan areas

PBT's ATM Direct - Cash Cow?

Pay By Touch's ATM Direct Looks to Add Another Network, More Online Retailers

ATM Direct, which this week announced agreements with an electronic funds transfer network and an Internet merchant to process PIN-secured debit card payments on the Web, has signed another online retailer, which will go live on its system in August.

This second, unnamed merchant, which does $250 million annually in Web sales, could be followed later in the summer by a third, Ziegler says, with which ATM Direct is now in talks. In addition, the company, a unit of biometric-payments processor Pay By Touch Inc., San Francisco, also plans to bring live a link to a second EFT network within 90 days, Ziegler says.

For 2007, Ziegler says, look for ATM Direct to process PIN debit payments on handsets as it rolls out a mobile version of its software.

Also on tap for next year, he adds, is a recurring-payment capability for utilities and other biller categories that may now accept so-called PIN-less debit transactions.

When launched, this product will allow these billers for the first time to accept recurring debit card payments, since EFT network operating rules currently do not permit recurring payments using PIN-less debit.

On top of this, ATM Direct has also begun marketing its software to banks as authentication technology that complies with guidelines released in October by the Federal Financial Institutions Examination Council that push banks to adopt multifactor authentication for online banking.

The flurry of developments caps months of behind-the-scenes work by the company, whose software allows consumers to enter debit card PINs securely on a computer screen, to bring its product to market following its acquisition last year by Pay By Touch (Digital Transactions News, Dec. 16, 2005).

Those efforts bore fruit this week with the announcements that the Bellevue, Wash.-based ACCEL/Exchange network has agreed to switch transactions processed by ATM Direct (Digital Transactions News, June 5) and that The J. Paul Co., a Dallas promotional-goods merchant, in July will begin accepting PIN debit payments on its Web site through ATM Direct.

Transactions will build over time, Ziegler says, as more and more of ACCEL/Exchange’s 3,500 banks bring their cards live on the system. “It’s a managed rollout,” he says. “Some issuers will be able to transact immediately, and we’ll add others over time. We want everyone on the network to have a real good experience.”

By year’s end, he projects, some 60% of ACCEL/Exchange’s 80 million cards will be enabled for ATM Direct. Transaction growth should accelerate, too, with the addition of the second EFT Network, which Ziegler refuses to name, as well as the large retailer.

ATM Direct’s selling proposition to smaller merchants is lower transactions costs, coupled with the fraud-management and guaranteed-funds features traditionally offered by PIN debit cards.

For larger retailers, says Ziegler, his product’s appeal lies in a 5% to 6% incremental sales increase the company’s research shows online merchants can gain by enabling customers to pay with PIN debit.

Though he won’t give specific pricing, he says ATM Direct’s fees to merchants should result in acceptance costs that are on average about half what e-commerce sellers now pay in card-not-present rates. Larger merchants will enjoy a bigger break, he says. Pricing, he says, will follow “multiple models,” sometimes including both percentage and fixed-fee components, sometimes not.

ATM Direct’s system works by downloading digitally unique code to the consumer's desktop, setting up a process of multifactor authentication in which the company can authenticate the consumer by recognizing the code and by means of technology such as geo-location. The company also sweeps the consumer’s PC for keyloggers and other trojans.

When the consumer is ready to buy and ATM Direct is satisfied the PC is secure, the system presents on the screen a keypad for PIN entry.

The pad is called a floating PIN pad because a different numerical configuration is presented each time. This process disables the computer keyboard, allowing entry only by mouse click. Once PIN entry is complete, ATM Direct returns a signed token to the merchant, asking if the merchant wants to go forward with authorization. If so, it creates a transaction message, including a PIN block with PINs encrypted at two-key triple DES, to go to the relevant EFT network for authorization and settlement at the issuing bank. In this sense, it operates as if it were another processor hooked into the EFT network’s switch.

Tuesday, June 6, 2006

7 Patent's Pending for PBT Web PIN Debit

ATM Direct Scores First EFT Network for Web-Based PIN Debit

In a development that could lead to the first significant use of PIN debit for Internet transactions, the ACCEL/Exchange electronic funds transfer network has agreed to handle PIN-secured debit card transactions processed by ATM Direct, a unit of San Francisco-based Pay By Touch Inc.

The network, which is based in Bellevue, Wash., and links 3,500 financial institutions and 80 million cards, is the first ATM network recruited by ATM Direct to handle transactions generated by its technology, which allows consumers to use their ATM cards and PINs to buy merchandise and services online.

The agreement between ACCEL/Exchange and ATM Direct comes nearly six months after the network, a unit of Milwaukee-based processor Fiserv Inc., first indicated it was planning to run a pilot of the Irving, Texas-based company’s system (Digital Transactions News, Dec. 16, 2005).

“We are pleased to participate in the introduction of an exciting value-add payment service like Internet PIN debit because of the potential it has to offer,” said Mike Williams, senior vice president of Fiserv EFT, in a statement.

ATM Direct says its system offers online merchants transactions at lower pricing than card-not-present credit card rates while also guaranteeing payment. For consumers, the company says, it offers higher security for Web purchases. The joint announcement from the two parties does not say when transactions will start flowing.

ATM Direct has also been in discussions with online merchants and service providers about accepting payments through its system. An unnamed merchant in Dallas was expected to be the first site operational on the system in 2006, Robert Ziegler, senior vice president and general manager at ATM Direct, told Digital Transactions News in December, though that merchant has not yet been announced. (It's JPaul Companies)

Up to now, EFT networks have been loath to allow PINs to be used on the Internet, fearing the potential for fraud. Only in the past couple of years have they allowed so-called PIN-less debit transactions, in which consumers can pay bills to a limited range of organizations using their PIN debit accounts but without entering a PIN.

For this reason, ATM Direct's technology, on which it has seven patent applications pending at the U.S. Patent and Trademark Office, has the potential to open the broad world of Web-based retailing to PIN debit, a rapidly growing form of electronic payment.

ATM Direct’s system works by downloading digitally unique code to the consumer's desktop, setting up a process of multifactor authentication in which the company can authenticate the consumer by recognizing the code and by means of technology such as geo-location. The company also sweeps the consumer’s PC for keyloggers and other trojans.

When the consumer is ready to buy and ATM Direct is satisfied the PC is secure, the system presents on the screen a keypad for PIN entry. The pad is called a floating PIN pad because a different numerical configuration is presented each time. This process disables the computer keyboard, allowing entry only by mouse click. Once PIN entry is complete, ATM Direct returns a signed token to the merchant, asking if the merchant wants to go forward with authorization.

If so, it creates a transaction message, including a PIN block with PINs encrypted at two-key triple DES, to go to the relevant EFT network for authorization and settlement at the issuing bank. In this sense, it operates as if it were another processor hooked into the EFT network’s switch.

Try A Live Demonstration - ATMDirect

Pay By Touch Announces First Ever Pin-Debit Payment Option for Online Purchases

Welcome to the World's Most Secure Internet Payment Method

Welcome to a live demonstration of the atmdirect Internet PIN-debit service.

PIN-debit has been proven to be the most secure payment method by over 20 years of retailing use. atmdirect delivers the same benefits of PIN-debit to the Internet including lower costs, lower risks, ease of use and real-time, guaranteed funds. atmdirect is the only software-only based service that meets or exceeds industry standards for PIN-based EFT transactions.

Trainer (Pay by Touch securely handles your PIN, with "No Keystrokes" to foil keyloggers.

We are launching this promotion in order to provide you an opportunity to see how you can use this exciting new payment method.

Or go to

Pay by Touch Makes History

Pay By Touch Announces First Ever Pin-Debit Payment Option for Online Purchases

The J. Paul Company Signs On as First Internet Retailer to Offer Pin Debit Payments for Shopper Convenience

Pay By Touch, the leading provider of biometric authentication, personalized rewards and payment solutions, today introduced the industry's first software-only PIN-debit payment service, offered via its ATM Direct division.

The new service, announced in conjunction with the 2006 Internet Retailer Show in Chicago, is an ideal payment alternative for consumers who have limited credit or are seeking a more secure way to pay on the Internet.

For Internet retailers, the service provides lower processing fees, reduced fraud and access to millions of consumers who are looking for increased security when using their debit card to make purchases on the Internet.

"Consumers want more secure financial transactions online, and our service provides a framework of multi-factor authentication and the increased security of using a PIN number to authenticate a debit card," said John Rogers, founder, chairman and CEO of Pay By Touch. This is an exciting first step that will be adopted by more and more card issuers, payment networks and ecommerce retailers who are dedicated to solutions that decrease Internet fraud."

The J. Paul Company, a promotional products provider, is the product's first customer. The Web-based retailer will begin offering the new payment alternative in July, and expects increased sales by customers who seek a more secure and flexible payment option.

"There are many people who don't have credit cards -- or prefer the security of authenticating their debit card transaction with a PIN online," said Steve Tabor, vice president of The J. Paul Company. "By allowing shoppers to use PIN-debit to buy products on our Web site, we're expanding our customer base."

Like PIN-debit payments in a brick-and-mortar store, Internet PIN-debit transactions are processed across the EFT networks directly with the consumer's bank, allowing real-time, guaranteed payments to Internet retailers at much lower transaction costs than those which are associated with credit card or signature debit card transactions.

ATM Direct's patented and patent-pending technology provides a complete framework of multi-factor authentication, advanced PKI, secure communications and behavioral analytics that enhance transaction security.

ATM Direct's technologies ensure that the consumer's PIN number is never available to the merchant, and is never accessible to others.

ATM Direct is the only service in the world that provides Internet PIN debit with software-only technologies that have been certified by leading
EFT networks.

Monday, June 5, 2006

PBT & Fiserv Launch Web First: PIN Debit

ACCEL/Exchange To Launch Online PIN Debit Payments BROOKFIELD, Wis.

announced Monday it has signed with Pay By Touch to have its ACCEL/Exchange EFT Network be the first electronic funds network to allow PIN-based debit transactions over the Internet.

Pay by Touch's ATM Direct solution allows PIN-based debit transactions to be processed over the Internet across EFT networks directly to a consumer's credit union or bank, allowing real-time payments to retailers at lower transaction costs than those associated with credit card or signature debit transactions over the Internet.

The Fiserv deal is the first in the planned market wide roll-out by Pay By Touch, the market leader in biometric payment systems. ACCEL/Exchange provides EFT services to more than 3,500 credit unions and banks.

For the first time ever, secure PIN debit transactions can be conducted on the Internet, saving merchants approximately 50% on their transaction processing fees. This can potentially result in annual savings of millions of dollars for larger internet retailers...

The link to the Press Release (you need Adobe Acrobat Reader) follows:
Pay By Touch announces ACCEL/Exchange EFT Network to introduce PIN debit payments via the Internet

UK: Millions at risk from chip and PIN

Two days after a poll revealed that 76% of users think Pay by Touch is more secure and reliable than Chip and PIN, comes this report by "This is Money": Millions at risk from chip and Pin

A spokesman for the Association for Payment Clearing Services, which speaks for the banks on plastic cards, admitted yesterday: "Chip and PIN security is fallible."

Look at the similiarity in the logos. The only difference is that I know the Chip and PIN user is entering a "2" wheras I don't know what the PBT user is entering...

Friday, June 2, 2006

You Can't Argue with the Numbers...

Merchants and financial-services companies have always been uneasy allies. In 2004 alone, U.S. merchants paid finance companies almost $40 billion in credit- and debit-card transaction fees, accounting for nearly 20% of the banks' payment revenue. Because many merchants operate on thin margins, they're fed up with the high cost of relying on banks to process customer transactions.

For a retail warehouse like Costco, total payment-transaction fees can run as high as 22% of pretax profits, according to a recent report by Bernstein Research, a consulting firm for institutional investors.

Currently, merchants pay a fixed fee plus a percentage of the transaction amount—also known as interchange fees—for accepting a card as payment. Credit- and debit-card transaction fees constitute the third-largest expense convenience stores face after rent and labor costs, says the National Association of Convenience Stores.

Because of these high transaction costs, merchants are constantly seeking technology innovations to level the playing field with their banking brethren. For merchants looking to save on processing costs, migrating to fingerprint biometric payment options from Pay By Touch is a good solution.

Biometrics refers to the measurement of unique human characteristics, such as a person's fingerprint, voice, iris, or hand geometry. Pay By Touch lets retail customers simply place a finger on a specialized scanner, register the transaction with their bank account, and walk out of the store with their purchase.

For merchants, Pay By Touch can lower costs and boost revenue by circumventing higher credit-card transaction fees, speeding up checkout times, promoting customer loyalty, and reducing fraud. For consumers, biometric payments offer safety and convenience.

Financial-services companies are closely watching merchants that are adopting Pay By Touch. Moves by merchants to alternate forms of payment could cut into their revenue stream.

Despite the financial benefits, biometric payments add another level of complexity for merchant CIOs that will ripple from the storefront to the corporate data center. Business-technology leaders considering biometric payments must acquaint themselves with the costs, implementation challenges, and concerns about security and privacy. Executives need to assess the organizational and operational impact of the Pay By Touch system technology.

Pay By Touch transactions in the United States can now be found at many gas stations, as well as liquor and convenience stores. For example, the Express Mart in Arnold, Mo.—part of privately held Home Service Oil Co.—recently introduced a gas-price promotion to entice customers into using biometric payments.

But the most visible early adopters have been retail grocery merchants, including Albertson's, the second-largest U.S. supermarket retail chain; Supervalu, the 8th largest, Minnesota-based Hornbacher's and Cub Foods; Missouri-based IGA stores; and Piggly Wiggly.

In mid-2005, Piggly Wiggly began enrolling customers in a pilot implementation of fingerprint payments at 85 stores. The service grew to include more than 25,000 shoppers. "The primary justification was to provide our customers with a payment alternative that was fast and easy," says Rich Farrell, VP of information services at Piggly Wiggly.

"We're enrolling customers every day and launch occasional promotions to motivate more customers to enroll," Farrell says.

Both customers and merchants find fingerprint-based payment convenient. For starters, card clutter or forgetting the wallet altogether is no longer a problem for the customer. Merchants will benefit from improved sales due to easier and faster checkout, improved loyalty tracking, and reduced fraud risk.

"We conducted a three-month pilot installation to validate the benefits and determine an acceptable ROI," Farrell says. "Lower transaction fees, improved checkout speed, and customers' excitement about the service were the primary reasons the service was rolled out." Piggly Wiggly found the
fingerprint-payment option increased customer store visits by 15% and total spending per customer by 12%.

"Each customer using the service saves us at least 25 cents for that transaction, "Farrell says. "On large transactions, we can [save up to] several dollars in fees compared with credit-card transactions."

Costs for biometric-payment systems vary depending on the size and scope of the project, but "initial setup costs can be budgeted at approximately $1,000 per shopping lane and include equipment, software, and installation," says Shannon Riordan, director of marketing at Pay By Touch, based in San Francisco. "Depending on merchant transaction volumes, recurring costs range from 8 to 16 cents per transaction."