Richard Reese, who oversees technology developments at Discover Card, the smallest of the "big four" card issuers, says contactless and biometric payment systems are likely to develop together. "We don't believe there's going to be any single solution that will win out over the others," he adds.

But for U.S. retailers, Pay by Touch offers a distinct attraction. It allows customers to pay directly from their own bank accounts, without using a bank-issued debit card. That reduces controversial network handling charges, known as interchange fees. These are currently the subject of an antitrust lawsuit brought by small retailers against Visa, MasterCard and leading banks.

"A debit card transaction is in the range of around 30 cents. Pay By Touch is in the low teens. It's a very, very low-cost transaction," says Piggly Wiggly's Mr. Farrell.

Story continues below ↓

advertisement | your ad here

He also hopes the system, costing about $200 per unit, will reduce the number of customers using cash or cheques, which still carry about 45 percent of U.S. consumer spending. In an initial test in largely suburban neighbourhoods, about 15 percent of Piggly Wiggly customers registered with Pay By Touch. However it may be harder to win over rural customers, who traditionally prefer cash.

"There are some people that will not use it because they look it as a Big Brother kind of thing. Others just don't have time to register," says Mr. Farrell.

Pay By Touch's John Morris says skeptical customers can sometimes be won over by explanation of the technology. The system, for instance, does not store information that can be used to generate a fingerprint, but an encrypted series of numbers identifying a combination of 40 data elements for each individual.

Mr. Morris is also convinced that people like the added security. It is, after all, "very hard to steal someone's finger."

< Prev | 1 | 2