 Biometrics: Your money; your security
By Robyn Porter, January 2003
Retailers are taking advantage of biometric applications that help improve business. Biometric applications at the point of sale, like check cashing verification and payment transactions, are lowering operating costs, reducing fraud and boosting customer service. Payments initiated with a biometric also reduce identify theft and speed check-out lines.
Secure payroll check cashing
According to the Financial Services Centers of America (FiSCA) more than 180 million checks, worth $60 billion, are cashed every year in the United States. Unfortunately, some of these checks are fraudulent and the losses are great. To protect their businesses, many owners have starting using Paycheck SecureSM, a payroll check cashing system by Herndon, VA-based BioPay, LLC that uses biometrics to verify a person’s identity and confirm their check cashing history.
Paycheck Secure uses biometric technology to electronically capture a customer’s fingerprint, store a template of the image, and then record check cashing transactions associated with that person. Each time a customer returns to cash a check, the person simply puts their finger down on the reader to begin the transaction. Paycheck Secure verifies the customer’s identity and allows the merchant to obtain real-time, check transaction information from BioPay’s IndivioSM database. If the customer’s check-cashing history is negative, the transaction can be cancelled, saving the merchant money it may have otherwise lost on a fraudulent transaction. If the check-cashing history is positive, the customer can easily get their money and quickly be on their way.
BioPay offers merchants the nation’s largest commercial electronic fingerprint database to help identify and stop fraud artists and repeat check-bouncers. Stored fingerprint images are converted into an algorithm, each including a 250 character number. Each time a customer initiates a transaction, these numbers are compared to confirm the customer’s identity.
Lopez Supermarkets, one of the largest grocery chains in Brownsville, Texas, has been using Paycheck Secure since June. “Fraud has virtually been eliminated,” says Jaime Lopez, the chain’s vice president. The company expects to use BioPay’s biometric technology for other financial applications in the future.
Many merchants, grocery stores like Lopez, convenience stores and check cashing merchants, have started using Paycheck Secure. In fact, nearly two million transactions, worth $2 billion, have been completed with Paycheck Secure.
Biometric payments
In a recent study, the Federal Reserve noted that checks remain the dominant form of non-cash payments. Many merchants prefer customers pay with checks because checks offer the lowest transaction cost. For example, it costs a merchant only $0.83 per $100 to process a check compared to credit cards transactions that cost the merchant $2.42 per $100, according to the Food Marketing Institute.
While it’s more cost-effective to process checks, checks are significantly less secure than other forms of payment. BioPay is beta-testing its bCheck service which allows merchants to accept payment using the lowest cost option while also giving them a powerful tool to avoid returned checks.
How bCheck Works
After a brief enrollment, bCheckSM let’s consumers pay for purchases by using their fingertip; no check, ID card or cash is required. Funds are securely transferred from the enrolled customer’s checking account to the merchant via the Automated Clearing House network. The transaction is performed like a normal check payment, but settlement is performed electronically and the fingerprint acts as the signature on the check.
During the enrollment process the customer’s driver's license or other ID is swiped or keyed and their two index fingers are scanned. The customer's preferred checking account is then associated with the identifying data. The entire process takes less than two minutes and all the information is securely stored in the BioPay system.
Customer Security and Convenience
Identity theft is the number one consumer complaint, according to The Federal Trade Commission. And, identity theft is growing. Biometrics are personal identifiers that can’t be lost, shared or stolen, so they are ideal in protecting one’s identity and personal information.
With Paycheck Secure and bCheck, financial transactions are initiated with a fingerprint. This means consumers don’t have to worry about someone else trying to cash their check or making a purchase from their checking account.
Combining biometrics with financial transactions is a win-win for both the consumer and merchant. For consumers, biometrics offer protection against identity theft and the convenience to quickly cash a check or make a purchase and be their way. For merchants, biometrics offer a powerful tool in fighting fraud, reducing costs and increasing revenue.
Some experts believe that it’s inevitable many financial transactions will be initiated with a biometric. BioPay is well on its way to making this belief a reality. With growing public acceptance of biometrics, Paycheck Secure and bCheck are leading the way into your favorite neighborhood store.
Visit BioPay at www.biopay.com
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