Touch & Go: Biometric Payment Options

The dull pain of hunger lures him towards the glowing face of the candy snack vending machine. His eyes greedily roam the rows of snacks as he extends a finger and firmly presses it against the identification pad. The computer quickly scans his print and links it up with his account information: Welcome Mr. Smith. As the rumble in his stomach grows louder, he pushes a button to select a bag of chips, salted, no ruffles.

This scene seems right out of a modern day spy movie, however with the advent of biometric technology, it may soon become a routine daily operation. The success of cashless and contactless payment options has paved the way for new forms of payment media to enter retail and vending machine industries. In fact, the number of locations participating in biometric payment options is expected to triple in 2006.

Biometric payment technology links personal characteristics like a fingerprint, retina, iris, hand, face, or voice pattern to a database of settlement sources. This new form of payment has already been adopted in some grocery stores but could become common place in vending machine technology. Consumers will be able to purchase ice cream from a frozen food vending machine or a soda from a soda vending machine with a simple wave of the finger.

The ability to purchase a coffee from a hot beverage vending machine without carrying around cash or cards greatly increases the security of the transaction. The customer does not have to worry about forgetting their credit card in the coffee vending machine. Credit cards or forms of contactless payment media can also be lost or stolen. Additionally, the use of unique physical attributes makes fraud and replication virtually impossible.

Not only does biometrics confer greater security to vending machine customers, but it also can help develop consumer loyalty. The technology that goes along with biometrics allows vending machine operators to integrate product-based marketing and frequent purchaser programs to customers. Discounts can be tailored to an individual's buying habits. For instance, a consumer who frequently purchases sodas from soft drink vending machines may be given a discount on their next cold drink machine purchase. This type of program helps vending machine operators track individual habits in order to maintain customer loyalty.

Finally, the speed of biometric vending machine transactions out competes cash and credit cards. It takes between 5-15 seconds for a customer to scan their finger, be identified, and purchase a chocolate bar from a candy snack vending machine.

So how do biometric payment transactions work? The unique physical characteristic like the fingerprint is stored as a biometric algorithm. This means that several data points of the fingerprint are stored and the actual fingerprint is not saved. Once the identification of the vending machine consumer has been made, the payment functions just like an automated clearinghouse debit. Since there are no credit card or signature-debit card transactions that need to occur, fees are about 75% lower than other forms of cashless payment.

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