Becky Yerak
Published December 29, 2006
Pay By Touch, the company that enables shoppers to pay through fingerscan verification rather than old-school cash or plastic swiping, continues to attract financing and beef up its management ranks, recently adding a former Home Depot Inc. and Sears, Roebuck and Co. executive to its payroll.
In January 2006 the privately held San Francisco-based company disclosed it had raised $190 million in financing from such investors as hedge funds Plainfield Asset Management LLC and Scout Capital Management LLC during a three-month period.
To date the company has raised more than $300 million in debt and equity financing from both existing and new investors, Pay By Touch President John Morris said in an interview Thursday.
"Things are going great, and we're building the business like mad," he said. "This is one of the rare times where you can deliver a win-win situation to everyone...identity theft prevention for the shopper, better security in terms of fraud for the retailer and increased speed and convenience."
Pay By Touch's patented biometric services enable shoppers to quickly access personal accounts using a finger scan to identify themselves, make purchases and earn rewards.
Rewarding Experience
Two weeks ago the firm purchased S&H Green Stamps, a company founded in 1896, and the first company to introduce the rewards concept. PBT intends to integrate the Green Points program with their personalized marketing division, called SmartShop.
Strategic Partners
Another reason investors feel good about Pay By Touch is because of whom they have been able to develop strategic partnerships with. To date, PBT has formulated strategic partnerships with some of the world's biggest and most respected companies, This impressive list includes IBM, NEC, Citibank, Discover, Microsoft, Accenture, Verifone and UPEK. The relationships are solid. IBM and NEC have installed Pay By Touch sensors in their hardware, Microsoft is using PBT as a payment processing partner with their new Vista operating system, due out next month, and UPEK is certified to enable PBT transactions via biometric sensors in all Lenova (formerly IBM) Thinkpads.
The use of the Pay By Touch fingerscan systems also coincides with the use of other biometrics in financial transactions. After conducting tests for three months, Citibank recently joined forces with Pay By Touch, and invested millions of dollars to introduce the world's first biometric credit card in Singapore.
Impressive Management Team
Pay By Touch's success has enabled it to attract high-profile talent, including former managers from such companies as IBM, Visa, MasterCard, Accenture, and Bank of America.
Joining Pay By Touch in September was John Costello, former executive vice president of merchandising and marketing for Home Depot. Costello filled the new post of president of consumer and retail operations, one of the top three jobs at the company.
Costello reports to John Rogers, Pay By Touch founder, chairman and chief executive. Costello will also serve on the firm's board of directors.
Costello joined Home Depot in November 2002 and was instrumental in the "You can do it, we can help" campaign. He left the home improvement chain in August 2005. Before Home Depot he was chief global marketing officer at Yahoo, and from 1993 to 1998 was senior executive vice president of Hoffman Estates-based Sears, leading its "Softer Side" marketing campaign.
Enrollment Numbers Increasing
In a story in March about the rollout of Pay By Touch in all 204 Jewel and Jewel-Osco stores, the Chicago Tribune reported that nearly 10,000 people had signed up since it was unveiled in January, citing store officials. Asked about enrollment Thursday, Morris would say only "it's tens of thousands, many more than 10,000 Chicagoans who have enrolled." In September, a Chicagoan, Mary Rodriguez, became Pay By Touch's 3 Millionth customer, and was honored at Wrigley Field.
"Chicago is doing great," he said. "We're up double-digits both on enrollments and transactions" percentage-wise since a November promotion in Chicago with a former "Trading Spaces" star.
"We'll have more retailers in Chicagoland in the first quarter," he said, declining to be more specific.
byerak@tribune.com
Copyright © 2006, Chicago Tribune
Joins Technology Office Grab
San Francisco Business Times
One of the largest leases in the city this year...Pay By Touch on Mission
Pay By Touch has agreed to move into 93,000 square feet of office space at 560 Mission St., one of the largest city lease deals of the year and a striking example of the role that technology is playing in San Francisco's office resurgence.
This is one of the last remaining "large chunks" of space available in the South Financial District.
The building, an architectural gem. features a unique bamboo garden, creating both an ambiatic and transcendental atmosphere which can go a long way to woo sum China companies.
The rapidly growing company has signed a letter of intent to absorb floors six, seven, eight and nine of the dark green Cesar Pelli-designed building.
For pictures, click here...
The deal would double the company's space and absorb all of the remaining sublease space that JP Morgan put on the market.
JP Morgan leased the entire building at the time of completion in March of 2000, but has since subleased more than half to other tenants, mostly in the financial service industry.
From San Fran Biz Times
John Costello, who recently joined Pay By Touch and currently serves as it's President of Consumer and Retail, and member of the Board of Directors chats with Susan Bratten from WebMaster Radio's DishyMix for an "very" interesting interview.
Anyone interested in learning more about the Hall of Fame marketer's career and insights will be riveted to their chair as Mr. Costello discusses his days at Sears, including the marketing industry's first rock n roll coup de'tat, (the signing of Phil Collins), his careers at Proctor Gamble, Home Depot, Yahoo, AC Nielsen, MVP.com, of course, Pay By Touch,...and why a man who could've had any job in the world, chose Pay By Touch as his next "hobby."To listen, click here or the title of this post and enjoy a bit of the history behind what makes a marketing guru tick.
_____________________________________________________________________________
About "Mr. John Costello"
John Costello joined Pay By Touch and its Board of Directors in September, 2006.
He brings more than 25 years of general management, retail and technology leadership to his work leading the companys biometric authentication and payment services, and spearheading its new personalized marketing and online businesses. Costello is best known for helping companies manage through high change environments.
Costello has been involved in some of the most visible business turnarounds and been associated with some of the most successful marketing campaigns including "Come See The Softer Side of Sears" and "You Can Do It. We Can Help." at The Home Depot.
He was most recently Executive Vice President of Merchandising and Marketing for The Home Depot, where he held responsibilities for the company's merchandising, marketing, advertising, and visual and store merchandising, public affairs, eCommerce and global sourcing, including the Company's sourcing offices in China and Mexico.
Costello joined The Home Depot in November 2002 as Executive Vice President & Chief Marketing Officer, and was promoted to assume responsibility for merchandising and global sourcing in August 2003. He led a major transformation of the merchandising, marketing, eCommerce and sourcing operations, and worked with the senior leadership team on long-term growth strategies.
Costello joined The Home Depot from Yahoo! where he served as Chief Global Marketing Officer. At Yahoo!, he worked with the CEO and senior leadership team on many of the strategies that are driving Yahoo's growth today. Prior to Yahoo!,
Mr. Costello was President and CEO of MVP.com, the Internet sporting goods and outdoor retailer, which he founded with John Elway, Michael Jordan and Wayne Gretzky.
He also served as President and Chief Operating Officer of Nielsen Marketing Research, USA, where he led a major restructuring of Nielsen's product line, customer service model and technology platform.
Costello served as Senior Executive Vice President of Sears from 1993 to 1998, and was a key member of the team that revitalized Sears with the "Softer Side of Sears" marketing campaign and increased focus on Sears' proprietary brands. He was an early leader of multi-channel retailing, and launched Sears.com and Sears' specialty catalog business to replace the "Big Book". He served as a member of Sears' Executive Committee and on the Board of Directors of Sears Canada.
Costello began his career at Procter & Gamble, where he held a number of senior marketing and brand management positions.
He also served as Senior Vice President of Sales and Marketing at Pepsi-Cola, USA where he became a "front-line soldier" in the cola wars.
A frequent speaker on industry trends, Costello was named one of the 30 Most Influential People in Marketing by Advertising Age, one of the Top 10 Merchants by DSN Retailing Today and was elected to the Retail Marketing Hall of Fame in 1997.
He has sat on the Board of Directors for The Quaker Oats Company (NYSE) and The Bombay Company (NYSE), and the Direct Marketing Association, and is a current director of the American Film Institute (AFI), the Steppenwolf Theatre, and the Georgia Aquarium.
Costello is also a director and past chairman of both The Ad Council and the Association of National Advertisers, and chaired the selection committee for the 2006 inductees into the Advertising Hall of Fame.
Co-Founder, Director and Former Co-Chair and Co-CEO of Sapient Brings 20 Years of Visionary Technology Leadership to Biometric Payment and Personalized Marketing Company
Pay By Touch, the leading provider of biometric authentication, personalized rewards and payment solutions, today announced that J. Stuart Moore, Co-Founder and Director of Sapient, has joined the board of Pay By Touch. Moore brings 20 years of visionary leadership, management and technology industry experience to Pay By Touch, and joins the Pay By Touch board as a part of the company's acquisition of S&H Solutions (S&H).
"Stuart Moore's experience in building innovative technology-based services companies makes him an ideal addition to the Pay By Touch Board of Directors," said John Rogers, Founder, Chairman and CEO of Pay By Touch. "His success in co-founding Sapient -- taking it public, leading it as Co-CEO through years of high-growth and creating significant shareholder value -- will prove invaluable as we continue our own high-growth trajectory and expand into new vertical and global markets."
Moore is a proven technology innovator and one of the visionary industry leaders of the past two decades. He is best known as Co-Founder and Director, and formerly Co-Chairman and Co-CEO, of Sapient Corporation, a premier global consulting firm that helps clients innovate in the areas of marketing, business operations and technology. Moore's focus on innovation, results and value were instrumental in establishing Sapient's reputation for delivering outstanding results for its clients.
Moore is also a founding investor and board member of S&H Solutions - a provider of customer-based loyalty marketing and retail solutions, including its iconic S&H greenpoints® program. With S&H, Moore used his expertise in personalized marketing in the retail environment to play an integral role in the reinvention and successful re-launch the nation's premier loyalty marketing program.
"Pay By Touch is changing the way the world shops with innovative payment and personalized marketing services that deliver convenience, security and savings," said J. Stuart Moore. "I am extremely pleased to join the Pay By Touch board as we bring the loyalty marketing and biometric payment pioneers together. I look forward to working with John Rogers and his team to make this powerful new combination a resounding success."
Moore holds a degree in Computer Science from the University of California at Berkeley.
To view a video presentation on S&H Green Points, click here.
Pay By Touch Acquires S&H Solutions/S&H Green Points and its Advanced Promotion Engine to Bring Personalized Marketing Applications to its Popular Biometric Payment Platform
SAN FRANCISCO, CA – (December 6, 2006) – In keeping with its corporate strategy to acquire companies that complement its portfolio and provide future growth opportunities, Pay By Touch today announced that it has acquired S&H Solutions (S&H) and its parent company S&H greenpoints.
Pay By Touch, founded in 2002, sees the deal as a ``perfect fit'' in its plan to use the fingerprint to preclude the need to carry around debit and credit cards, cut merchant costs by processing transactions to sidestep Visa and MasterCard's networks, and steer customized promotions to consumers.
S&H, which dates to 1896, is renowned for its early role in rewarding loyal customers. Generations of grocery shoppers collected Green Stamps at the supermarket, pasted them into books and redeemed them for merchandise. That program has evolved into a digital rewards program called S&H greenpoints.
The two companies previously had teamed up for a pilot program at a grocery store in Rochester, N.Y., where customers pressed their fingers to a reader at a kiosk to receive coupons tailored to their past purchases. Shoppers redeemed 8 to 40 percent of the coupons, vs. the typical rate of less than 1 percent, a spokeswoman said.
The purchase price was in excess of $100 million in cash and stock. S&H Solutions is a leading provider of customer-based loyalty marketing and retail solutions. Many years and more than $200 million dollars have gone into developing the company's real-time marketing technologies, including a highly sophisticated analytical engine that enables retailers to deliver one-to-one consumer messages in-store through multiple proprietary platforms.
"S&H Solutions' unique marketing technologies and advanced promotion engine are years ahead of anything else in the marketplace. We looked at personalized marketing services, and, around the world, none of them even comes close," said John Rogers, Founder, Chairman, and CEO of Pay By Touch.
"S&H's unparalleled solutions and top-tier team make it the perfect strategic fit with Pay By Touch. We are extremely pleased to welcome the S&H team, and look forward to working together to help merchants deliver the right offer to the right shopper at the right time."S&H Solutions' suite of services also includes the S&H greenpoints® Reward Program, the digital reinvention of the Sperry & Hutchinson Company's Green Stamps. The nation's first loyalty marketing program (circa 1896), the S&H greenpoints program rewards millions of consumers with points for every dollar they spend at participating merchants.
"Pay By Touch is the leader in biometric authentication for payments and S&H has built world class loyalty marketing systems," said Ron Pedersen, CEO of S&H Solutions. "Together we will transform the personalized marketing industry by offering unprecedented opportunities for relevance marketing and customization."
In connection with the S&H acquisition, Pay By Touch is also pleased to announce that J. Stuart Moore, a Director of S&H Solutions, will join the Pay By Touch Board of Directors. Mr. Moore is also Co-Founder and Director, and formerly Co-Chairman and Co-CEO, of Sapient Corporation.
About Pay By Touch
Pay By Touch (http://www.paybytouch.com/) is wowing the world one touch at a time as the global leader in biometric authentication, personalized marketing and payment solutions. To date, patented Pay By Touch™ biometric services enable 3.4 million shoppers to quickly and securely access personal accounts using a finger scan to identify themselves, make purchases and cash checks at 2,700 locations nationwide. It also provides robust payment processing solutions for ACH (electronic checking), card-present and card-not-present debit and credit transactions for retail clients. Founded in 2002 and headquartered in San Francisco, Pay By Touch employs 700 professionals and holds more than 50 patents worldwide on secure, convenient and cost-effective transaction solutions.
About S&H Solutions
S&H Solutions is a leading provider of customer-based loyalty marketing and retail solutions. The company provides sophisticated, real-time technology and knowledge that enables retailers to deliver one-to-one messages in-store through multiple proprietary platforms. S&H, Green Stamps, S&H greenpoints, greenpoints and S&H Solutions are registered service marks of The Sperry and Hutchinson Company, Inc. Additional information is available at http://www.shsolutions.com/ and http://www.greenpoints.com/.
Biometrics' answer to identity verification
By Lynn Tan, ZDNet AsiaTuesday , December 05 2006 05:25 PM
The million-dollar question: How secure is fingerprint authentication?
Those that have implemented the technology, however, emphasize there is little cause for worry.
According to M.N. Rangaraj, senior country operations officer of Citibank Singapore, the Pay By Touch fingerprint authentication system that the bank uses does not capture images of the fingerprint. Citibank launched in November the world's first biometric cardless payment service for credit card transactions.
Instead, the system looks for certain aspects of the ridges on the finger, also known as minutiae points, and encrypts them in numerical format--in a series of numbers that cannot be used to reverse engineer and recreate an image, Rangaraj explained in a phone interview with ZDNet Asia.
To safeguard customers' information, "neither biometric nor financial information is stored at the retail location, and fingerprint [data] is not transmitted back and forth to the point of sale", according to Krista Thomas, vice president of corporate communications at biometric authentication vendor Pay By Touch, in an e-mail interview.
All the encrypted data are stored at "secure IBM data centers, which abide by financial industry security standards", in a completely separate database from all other personally identifiable information--such as name, address, and financial account information, Thomas explained.
"In fact, these IBM servers are located in fortress-like facilities with security guards, bulletproof glass, mantraps, biometrics, video cameras and alarmed doors--like in a scene out of Mission: Impossible," she said.
According to Thomas, Pay By Touch also performs security audits and vulnerability tests with external security experts routinely to ensure security on an ongoing basis.
"Our encryption is better than--the security used to protect your ATM PIN code, which has been seen as the model to strive for in the industry," Thomas said.
According to Thomas, the fingerprint authentication system also helps to deter fraud. Writing checks, for instance, creates multiple opportunities for fraud because it lets "as many as 10 people view the information on a check before it is processed".
In contrast, she explained, the Pay By Touch system does not even let the cashier see a customer's payment information as the data is encrypted. "If you write just five checks in a week, that creates 50 opportunities for fraud," Thomas noted.
Is it foolproof? The biometric system authenticates the transaction by matching the data captured from the user's finger ridges at the point of the transaction to the encrypted data stored in the secured database, Rangaraj explained.
Before the transaction is approved, the user would also be required to key in a seven-digit "Personal Search Number" after pressing their finger to a biometric scanner as an added layer of security.
However, a replicated copy of the fingerprint image will not work as fingerprints do not carry minutiae points. Rather, the system requires the actual finger to be on the authentication device so that the sensor can detect certain unique characteristics of the finger, Rangaraj said.
On top of that, the sensor will also automatically check for moisture and warmth of the finger, he added. As such, prosthetic or fake fingers will also not work, Rangaraj said. ZDNet Asia understands from Pay By Touch that while some finger sensors detect pulse and heat, the sensors that the company is presently using do not have these functions.
Consumers' choice
According to Thomas, a recent study conducted by IT services vendor Unisys revealed that consumers around the world are becoming more comfortable with biometrics.
Results of the research released in April this year indicated that "70 percent of consumers worldwide support the use of biometric technologies to verify their identity, while 66 percent [of consumers] favor biometrics as the ideal method to combat fraud and identity theft as compared to other new payment methods such as smart cards and tokens", Thomas said.
Pay By Touch launched its fingerprint authentication system in Thriftway Supermarket in Seattle in 2002. To date, the San Francisco-based company has worked with several retailers, including a small grocery chain in the United Kingdom and larger brands such as Albertsons' Jewel Osco chain in Chicago, SUPERVALU's Farm Fresh in the Southeast, and Lowes Foods in the Midwest, to use biometrics as a form of authentication commercially.
.jpg)
Becky Yerak
"Things are going great, and we're building the business like mad," he said. "This is one of the rare times where you can deliver a win-win situation to everyone...identity theft prevention for the shopper, better security in terms of fraud for the retailer and increased speed and convenience."
The use of the Pay By Touch fingerscan systems also coincides with the use of other biometrics in financial transactions. After conducting tests for three months, Citibank recently joined forces with Pay By Touch, and invested millions of dollars to introduce the world's first biometric credit card in Singapore.
In a story in March about the rollout of Pay By Touch in all 204 Jewel and Jewel-Osco stores, the Chicago Tribune reported that nearly 10,000 people had signed up since it was unveiled in January, citing store officials. Asked about enrollment Thursday, Morris would say only "it's tens of thousands, many more than 10,000 Chicagoans who have enrolled." In September, a Chicagoan, Mary Rodriguez, became Pay By Touch's 3 Millionth customer, and was honored at Wrigley Field.
