Credit card processing and in-store biometrics vendor Pay By Touch Monday launched a new identity verification service aimed at giving online shoppers a secure, fast and free way to make purchases by using their fingerprint to verify their identity.
The service, called TrueMe, uses a fingerprint scanner to verify a buyer's identity for e-commerce businesses that are registered and equipped to participate. The service can help companies reduce fraud losses and better protect customer data from online thieves, according to the company. (http://www.paybytouch.com/business/merchants/multi_factor.html)
Fingerprint readers have been tried in the past by other vendors to protect online transactions, said Jon Siegal, an executive vice president at San Francisco-based Pay By Touch, but those efforts didn't incorporate a tight certification process and vendor participation to make identity authentication a reality. "Most of them were positioned as convenience toys for users," he said.
The difference with TrueMe is that Pay By Touch has existing relationships with brick-and-mortar stores and online retailers through its credit card processing business, as well as other business relationships through its customer loyalty card operations. As a result, the company expects to attract a wide range of businesses -- from retailers to banks to brokerages -- to offer the service, he said. The company also provides real-time fingerprint scanning services inside 2,400 retail stores, banks, convenience stores and other locations in 44 states.
The small fingerprint scanners used by the system are already being integrated into laptop computers, including hardware from Lenovo; They will also be available as a USB-powered device that plugs into a user's computer and costs less than US$30. The stand-alone biometric scanners are provided by vendor UPEK.
TrueMe allows users to skip the old-fashioned process of logging in with user names and passwords, instead allowing online shoppers or banking customers to swipe their finger over a fingerprint scanner and be identified and authenticated as a legitimate customer. Once authenticated through a secure connection between the scanner and Pay By Touch's servers, the customer's purchases or banking transactions are processed.
People have too many user names and passwords to manage safely, Siegal said, and for businesses, resetting lost user names and passwords can be a costly and time-consuming issue. The worst problem, though, is that user names and passwords can be intercepted by thieves using keylogging software or other means.
"The security problem today and the threat level are much higher than they were four or five years ago," Siegal said.
Pay By Touch now plans to leverage its existing relationships with stores and banks to offer potential customers a range of options, he said.
Business services vendor Salesforce.com, will be offering the authentication services to its employees and customers later this month, Siegal said. "There will be users using it in November," he said. Fees for the services are expected to be paid by merchants in much the same way they pay for credit card processing services. Consumers will not directly pay for the authentication services, he said.
Roger Kay, an analyst with Endpoint Technology Associates said that Pay By Touch's plans for a secure fingerprint ID system "seems good or likely to work" because the company has deep connections with a myriad of retailers, banks and other business that would be interested in transaction security. "If you look at this, I would say that it's got a better chance now of working than of any time in the past," Kay said. "I think they're well-positioned."
Tom Elliot, an analyst with Strategy Analytics acknowledged the security benefits of TrueMe, but wondered whether customers would plug a USB fingerprint scanner into their computers so they could use the technology. "I haven't seen any [data] that people are buying less online" because of security worries, he said.
On the other hand, Elliot said, if consumers can "take a reasonable step" and buy a plug-in fingerprint scanner for less than US$30 and use it to increase their security online, then maybe they would go for it. "The security story is pretty good," he said. "It sounds plausible to me."