| A recent research report from TNS shows that over 40 per cent of shoppers expect to be paying by fingerprint by 2015 and that consumers in the UK find this sort of payment method most appealing out of all the countries surveyed, with 31 per cent of people giving it the thumbs up.
What undoubtedly set fingerprint payments back a few steps was the failure this year of US-based Pay-by-Touch, which had run extended trials with Midcounties Co-operative in the UK and been a high-profile advocate of this new method of paying. However, Mary Brett, senior vice president at TNS Retail Forward, says: “This was one of the primary vendors in the US but its going out of business was a reflection of its management rather than the business. It is a reflection not of the technology or the acceptance of it.”
She is predicting growth in the adoption of biometrics on the basis of its undoubted convenience for consumers: “They find it appealing because it speeds up the shopping process. Transactions are more convenient and quicker, there is less hassle.” What Brett also believes will be a big driver of biometrics is the acceptance of such technology by the younger generation (who will be its main users in the future), whereas older consumers question whether it is simply an invasion of privacy as it enables companies to collect and store yet more data on individuals.
“People in their teens and twenties will soon be in their ‘household formation’ years and for this group they have a different relationship with privacy as they are used to sharing their information on Facebook and MySpace. They do not have the same concerns as the older generation,” she explains.
Balancing act
This might well be the case but great care still has to be taken, according to Vinod Bange, associate specialising in data privacy at legal firm Eversheds, who says retailers using biometric technologies have to balance the risk involved in using it versus the commercial value it brings. He warns that in many cases using biometrics could be akin to “using a sledgehammer to crack a nut” as other solutions might work equally well. The issue he has is that biometrics is “very specific to one person and is as personal as it gets” – this means that the issue of data protection is paramount because the risk to a retailer from losing such data could be very serious. “If you could do something with less valuable data, then that is a route you should go down,” Bange suggests.
Another risk is ‘scope creep’ whereby an organisation implements biometrics for one solution (such as an alternative payments method) but then starts to use it in a variety of other ways. “Data protection control has to pervade right through an organisation – and this is especially the case when using high-risk data such as biometrics,” he says.
The potential for scope creep is undoubtedly high because there are certainly many ways that biometric technology can be used within a retail organisation – and it is cost-efficient. Jim Fulton, vice president of marketing at DigitalPersona, says: “It’s the type of technology that can be employed for one problem and then be used for another issue, often after it has already paid for itself.”
He says an increasingly popular use of fingerprint authentication technology is for clocking in and clocking out which prevents ‘buddy punching’, whereby people clock in for friends. When biometrics have been used for such a purpose he says companies have soon realised that, because it is easy to use and very cost-effective, it is possible to link the readers into PoS systems and better manage till security. “Because fingerprint reading is easy-to-use it could be used for every till transaction. This would stop the false ringing of sales (‘sweet-hearting’). You could have readers on all devices – tills, laptops and notebooks – for improved security,” says Fulton.
Pushpendra Jhala, CEO at Nivid, agrees that the technology is cost-effective and can quickly deliver a ROI for retailers. Nivid has supplied its Time Manager System to six Budgens stores (operated by franchisee Erongrove) and more franchisees are considering implementing the technology – initially for preventing buddy punching.
Jhala says the devices cost as little as £695 plus VAT and are helping Erongrove save £10,000 per year from eradicating false clocking in. “It’s the biggest form of losses after material shrinkage and can be a 2.7 to three per cent loss on the payroll. Our system eliminates this,” he says.
The use of biometrics for the likes of clocking in and other security-related issues highlights how the technology is being used as an employee-facing solution, but it is yet to be widely adopted
within consumer-facing environments. Sean Taylor, business development (Iris recognition) at Panasonic Systems Solutions Europe, believes this is partly down to retailers having not yet worked out how to deal with the user interface with customers: “A big consideration for retailers is the end-customer interaction, which is crucial. Retailers have to decide which technology best fits within their stores.”
To help this interaction the latest developments by Panasonic for its iris scanning technology has included a rapid capture system (incorporated into its BM-ET200 model) that involves the device taking a series of photos of the customer’s eye every 0.2 seconds. This makes it possible to get an accurate image of a person’s iris even as they move their head and negates the need for them to stand still, which would be unacceptable in a fast-paced retail environment. What also helps customer interaction is the accuracy of iris scanning, which makes it unnecessary to also have key code verification that forms part of some biometric solutions.
Although Taylor says the use of biometrics in the retail sector is still limited he predicts it will become much more widespread in the future. As the technology is adopted in an increasing variety of non-retail areas including airports for fast-tracking, government systems, schools, care homes and other commercial environments then merchants will at the very least have to place it on their IT agendas.
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