Why PBT is Ripe for Gas Stations

Number one on Yahoo's list of "Most E-mailed" news articles was one from PC World regarding newly discovered risks associated "paying at the pump" with your credit card. Pay By Touch would alleviate these risks, along with redirecting debit transactions through the ACH Network, saving the owners off Interchange fees. Look for Pay By Touch to make huge inroads this year in this vertical marketplace.

Here's the article in full...

Gas Stations Ripe for ID Theft?

Jeremy Kirk, IDG News ServiceTue Jun 26, 11:00 AM ET

Using a credit card at a gas station could pose more of a risk for data theft than shopping online, as point-of-sale terminals have emerged as a weak link in the security chain, according to a Gartner Inc. analyst.

When a card is swiped, point-of-sale (POS) terminals often collect and store the data held in the magnetic stripe on the back of a credit card, said Avivah Litan, a Gartner vice president and distinguished analyst. Retailers are often unaware that their POS applications collect so much information.

In the hands of sophisticated hackers and counterfeiters, the data collected from the magnetic stripe is enough to create a replica card. "It's almost more dangerous to go to the gas station than it is online," Litan said at Gartner's Identity and Access Management Summit in London on Monday. "The data is just sitting there. No one even thought about what data is on a POS controller."

Retailers' network configurations are partly to blame. Many are using the Internet to transmit data in place of dial-up networks, and many have incorporated wireless access points into their networks using WEP (Wired Equivalent Privacy), Litan said, which is not considered a strong form of encryption.

Hackers lurk in parking lots looking for weak networks to penetrate. Since the POS terminals are linked via IP, once a hacker has accessed a network they can try out neighboring IP addresses until they locate a store of data, Litan said.

Data breaches that occur offline are common. Of 160 breaches investigated for one major credit card brand, 128 took place in the brick and mortar world where the card was physically present for the transaction, rather than being used online or over the telephone, according to Gartner.

To strengthen security, card brands such as Visa and Mastercard are pressuring retailers to comply with the Payment Card Industry (PCI) Data Security Standard, a code of best practices created by the card industry. The standard forbids the storing of magnetic stripe data on POS terminals, and Visa plans to start fining retailers in the coming months if they don't comply, according to Gartner.

Implementing security is cheaper in the long run than having a data breach, which can be expensive and hurt a company's reputation. Gartner calculates that a data breach costs companies around US$300 per exposed account because of investigations, fines and lawsuits. On the other hand, beefing up security costs around $16 per account for the first year, and that cost falls over time, according to Litan.

The short-term forecast for POS security doesn't look great, however. Gartner predicts that by next year, most attacks against retailers will be directed at their POS terminals, and only 30 percent of POS software will be compliant with the prevailing security standards by 2009.

"The thieves always find the path of least resistance," Litan said.

Copyright © 2007 PC World Communications, Inc.

Pay By Touch Puts its Finger on Loyalty

Here's an article from Financial Times published Thursday, June 21st...

By Jonathan Birchall
Financial Times

In Citigroup (NYSE:C - news)'s most recent annual report, the world's largest financial company began its list of achievements in 2006 with its launch of a biometric credit card in Singapore.

Citi card customers can now buy film tickets, Japanese food, or drinks at the Zouk night club by pressing their finger on a scanner, typing in a personal number, and automatically debiting their card.

Meanwhile, shoppers at several Shop 'n Save supermarkets in Pittsburgh are signing up for SmartShop, a card-based loyalty system that directs special offers to each customer based on their previous shopping history

"Both Shop 'n Save and Citi are using technology developed by Pay By Touch, a rapidly expanding privately held company that wants to shake up a global payments industry dominated by Visa, MasterCard and American Express."

Over the past three years, Pay By Touch's biometric network has expanded from a pilot scheme at Piggly Wiggly supermarkets in South Carolina to more than 3,000 locations, including the Jewel-Osco chain in Chicago, part of Supervalu.

Supervalu, the second largest traditional US grocer, remains the system's largest client, although a senior executive from the UK's Tesco last year highlighted Pay By Touch's system in a review of new payments technology - noting in particular the potential for integrating biometrics into its current ClubCard loyalty scheme.

Several factors lie behind the surge in interest. The biometric system still allows a customer to choose from an "electronic wallet" of payment methods, such as direct debits, credit card accounts, or state food benefits.

But for retailers such as Stop 'n Save the system offers the possibility of reducing cheque processing costs by making it easier for customers to pay from their bank accounts. But it also offers the ability to ensure that the mountains of data on customer habits accumulated using retailers' loyalty cards is accurate - since purchases can be tied to the biometric identity of the customer, rather than to a transferable card with questionable or out of date information on the customer.

Beyond simple payments, Pay By Touch has sought to move further into customer loyalty with its SmartShop technology - which uses proprietary software to offer weekly incentives and special price cuts to an individual customer based on their shopping habits and preferences.

For retailers, the system offers a way to direct offers effectively to their most loyal customers, rather than supporting "cherry picking" of bargains by customers who only buy the offers.

John Morris, president and chief operating officer of Pay By Touch, says that pilots of the technology in Pittsburgh and New York have seen the card-based technology adopted by about 20 per cent of the participating store's customers - against the estimated 1 per cent of customers who respond to traditional mailings of coupons.

"Our data suggests they're doing more of their shopping at the store where they're getting their offers," says Mr Morris, a veteran of IBM.

Pay By Touch now has about 800 employees and is largely unchallenged by biometric competitors, since it acquired its main rival in 2005. It has also won over $300 million in financial backing, including support from Ron Burkle, the billionaire investor who made his reputation in retail

Copyright The Financial Times Limited 2007

Pay By Touch Survey Results

New Consumer Survey Reveals Positive Response

to Discount Coupons In-Store

UK – Despite traditionally low redemption rates and consumer apathy to money-off coupons in the UK, a recent survey carried out on behalf of Pay By Touch has proved shoppers have a positive response to discount schemes if they are both highly targeted and convenient to use.

In fact, the survey revealed that 88% of shoppers would use discount coupons, if these were more focused on their product preferences and were available in store while they were shopping.

Of those surveyed, 95% of shoppers who use a retail loyalty card have received in-store discount coupons. However, 75% of these shoppers said they frequently forget to redeem them even though some of the discounts offered were on items they normally buy.

Other factors that contributed to low redemption rates were the inconvenience of having to carry pieces of paper around and the fact that discounts were mostly for items the shopper did not have a history of buying.

It seems clear, therefore, that retailers who offer targeted discounts and make it easy for those offers to be redeemed, could have a compelling way to develop customer loyalty.

At Retail Solutions this week, Pay By Touch will be demonstrating SmartShop, its new in-store personalized marketing solution. SmartShop combines Pay By Touch's patented biometric technologies with its relevance marketing platform to offer unparalleled targeting based on shoppers' known preferences and established buying habits, to provide the first truly personalized marketing solution for retail environments.

Shoppers collect their offers by simply identifying themselves at the SmartShop kiosk when they enter the store. By identifying themselves again at checkout, discounts are automatically redeemed for any items they have purchased without the need for paper coupons.

SmartShop provides retailers with customer-based metrics and accurate data that improves the efficacy of marketing campaigns. SmartShop's sophisticated targeting engine 'learns' from each shopping trip to generate the next set of rewards. It provides analytics to make reporting and account settlement easy and accurate.

SmartShop has been available at Green Hills supermarket in Syracuse, NY, USA for the past 12 months and is now being adopted by other US grocery retailers.

Over 100 shoppers were questioned in May 2007 by an independent research agency.

Incentive Magazine on PBT's SmartShop

Loyalty's Only a Touch Away

Technology puts customer loyalty at your fingertips with Pay By Touch's biometric kiosks.

By Stacy Straczynski


You walk into your favorite coffee shop, a machine scans your finger, and the cashier begins making your usual order—remembering that you prefer soy milk. And your account is automatically charged, without your debit card. Talk about service!

No, it's not the Twilight Zone, it's the future of customer service. Consumers crave personalized experiences, and companies must find innovative ways to treat customers as individuals, not revenue generators. New technology is helping businesses belly up to the bar.

Biometrics...fingerprint authentication, leads the tech savvy trend. The San Francisco–based biometric authentication company Pay By Touch allows customers to use a virtual wallet—accessed by their unique fingerprint at checkout. By placing their finger on a touch pad, customers can pay for purchases without worry of identity theft or need for a wallet.

Pay By Touch's fingerprint recognition is being used to increase loyalty with their SmartShop program.

In-store kiosks distribute loyalty offers to participating customers before they shop, using fingerprint recognition for a personalized experience. Coupons are tailored to their previous shopping purchases.

This one-on-one marketing aims to increase redemption rates.

"SmartShop delivers sixteen offers based on what you like to buy—each customer gets a different set," says Shannon Riordan, vice president of marketing at Pay By Touch.

"[The program] sees if a customer prefers Coke to Pepsi and gives them the appropriate coupons. If a mother buys diapers for her new baby, it knows when [her] baby will turn two and delivers age-relevant products."

At Green Hills grocery store in Syracuse, N.Y., one year of the SmartShop pilot program has already impacted the store's revenue—49 percent of customers are cardholders and use the system every time they shop. The store also saw 10 percent increases in shopping frequency and basket size.

The lesson: Give customers the personal shopping experience they want, and they undoubtedly will come back to do business again.

Editors Note: In a related development, Piggly Wiggly is introducing the SmartShop program which will be known as "The Perkolator" in their brand new state-of-the-art store at the northwest corner of Burnt Church Road and the Bluffton Parkway will open next week.

The Pay By Touch system, where a customer's finger replaces a debit card, and the Pig Favorite Customer loyalty card will be familiar to Piggly Wiggly shoppers.

But the "Perkolator," a computerized kiosk where customers can swipe their savings cards for on-the-spot, individualized daily specials based on a person's shopping history, will be brand new to Lowcountry shoppers, Rita Postell, a spokesman from Piggly Wiggly said.

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UPEK and Pay By Touch co-host Digital Identity Showcase

What: First Annual Digital Identity Showcase
When: Tuesday, June 12, 2007 4:30 PM - 7:30 PM PST
Where: St. Regis Hotel, Gallery 1, Second Floor 125 3rd Street, San Francisco, CA 94103

To publicize and promote the momentum biometrics is experiencing in an ever-widening array of industries, Emeryville-based UPEK, Inc., the world leader in biometric fingerprint security solutions, and San Francisco-based Pay By Touch, the global leader in biometric authentication, personalized marketing and payment solutions, are co-hosting a Digital Identity Showcase for members of the press.

Press are invited to learn more about biometric applications being deployed in a diverse array of industries including healthcare, banking, education, government and enterprise. This interactive showcase will feature a retail store-of-the-future, examples of biometrics being deployed by credit unions, airlines and schools, and products from leading brands of notebook computers, flash and hard disk drives, keyboards, and ID verification devices.

Executives from UPEK and Pay By Touch executives will be on hand; hors d'oeuvres, soft drinks and cocktails will be served.

Please RSVP to Lisa Kennedy (415 623 4869) to confirm your attendance.

SOURCE: UPEK, Inc.

Citi Annual Report - Excited about PBT

In it's Annual Report (Adobe PDF Format) Citibank talks about it's excitement over partnering with Pay By Touch and bringing biometrics to it's customers.

Click on the picture on the left to enlarge and read page 10, which talks about the "innovation" Citi brings with biometrics from the Annual Report.

In a related development, Pay By Touch is telling ComputerWorld Singapore that it has 10 Million Customers enrolled worldwide...mostly in Asia (Asia's Biometric Scanning Craze) and Europe.

Here's an excerpt from that article.

Fingerprint recognition has penetrated the market to a certain degree, and the traditional drawback of this form of biometrics -- cost -- is eroding.

The cost of fingerprint readers has dropped to the point that they are shipping with inexpensive laptops and add-on USB readers can be purchased for as little as $30.

Another advantage of fingerprint based authentication is that it smoothly bridges the offline and online worlds. Pay By Touch, a provider of fingerprint-based authentication, gained its early traction in retail settings, using fingerprint authentication as a replacement for debit cards, check-cashing services and as a way to store shopper information without forcing customers to carry around store loyalty cards.

"According to Pay By Touch, its authentication service is used by more than 10 million consumers at more than 3,000 retail locations. Most are in Europe and Asia",

but several chains in the United States, including Albertsons, Jewel-Osco and Lowes Foods, have started rolling out the service. As consumers get comfortable with this as a means of brick-and-mortar shopping, Pay By Touch intends to extend this to the online world.