Electronic Point of Sale
Electronic Point of Sale: The Latest Thing — Using Biometrics for Point of Sale (POS) purchases
Is using biometrics for electronic point-of-sale (POS) purchases right for your business?
Many of us have heard about computer-based fingerprint ID systems. But the question is whether they work and how you can determine whether the technology is right for your electronic point of sale transactions.
What are often referred to as biometric technologies are systems which measures human traits such as fingerprints, retinas and irises, voice and facial patterns, and sizes and shapes of hands. This technology has been used by airports, law enforcement agencies and assorted businesses for security purposes and to provide access into secure buildings. During the past few years, biometric fingerprint identification technology has drawn interest from the retail sector to serve as a way to identify customers during electronic point of sale transactions, reducing credit card and check fraud. The technology can also be used in conjunction with a point of sale payment terminal to actually transmit payments, which results in faster transactions.
Numerous manufacturers now make these biometric systems. Several companies can provide biometric software and sensors, which are then installed on electronic point of sale terminals. A few companies offer both the software and the terminals.
Biometric electronic point of sale payment systems are most widely used by supermarkets, but they are also being pilot-tested in several fast-food restaurants nationwide and have applications at electronic point of sale terminals at gas stations and hotels as well. Customers register a fingerprint scan with a store or restaurant and enter their credit or debit card account numbers to set up their accounts. When it comes time to make purchases, customers place their fingers on the sensors at the electronic point of sale for identity purposes and pay without ever having to show their cards. The systems can also be used with checking accounts, where electronic checks are processed through an automated clearing house at a reduced cost to merchants, who pay only 8 to 12 cents (compared to the 54 cents it costs to process a conventional check). Once customers have registered, merchants can also use the technology to keep track of loyalty programs and eliminate paper coupons.
There are a few drawbacks to these biometric electronic point of sale systems, including the possibility of a customer being misidentified, which could lock him or her out of the system, or a scanner that fails to scan someone’s print because the finger has dry or cracked skin or skin with shallow ridges. Despite these challenges, biometric electronic point of sale systems can offer merchants a reduction in fraud and chargebacks (disputed transactions), faster transaction turnaround times at the point of sale, easier-to-manage loyalty programs and improved reporting methods.
To encourage customers to use this new electronic point of sale technology, some retailers have tied fingerprint identification registration to customer loyalty programs by offering additional loyalty points to those who register their fingerprints. Biometric electronic point of sale systems allow merchants to:
- Confirm a customer’s identity.
- Offer customers another payment option at the point of sale.
- Verify check history to weed out potential bad checks.
- Make customer POS payments more secure.
- Offer more efficient service.
- Maintain better reporting methods.
- Reduce fraud because fingerprints are unique to each individual and cannot be forged at the point of sale.
- Provide faster transaction times.
Merchants’ interest in biometric fingerprinting technology for electronic point of sale transactions is increasing as scanners decline in price. The electronic point of sale fingerprint scanners are compatible with most point-of-sale terminals. The technology also has applications for restaurant point of sale drive-up windows and electronic point of sale stations at gas pumps, for automated check-in systems at hotel counters and for ticket-driven businesses such as movie theaters and amusement parks. However, none of these options is likely to happen in the near future–until the biometric electronic point of sale systems become more accurate. Currently, some scanners misidentify individuals (for the reasons mentioned earlier), denying them access to the system. According to some analysts, it will take several years for merchants and their customers to accept this technology as a substitute for credit and debit cards and as identification for checks.
When you investigate biometric electronic point of sale fingerprinting systems for your business, keep the following guidelines in mind:
- Determine what your needs are. For example, do you need the system as an additional noncash payment option, as a way to identify a customer who writes a check or as a tie-in to loyalty programs?
- Look for units with built-in security, encryption and verification electronic point of sale software.
- Don’t believe any biometric manufacturer who tells you the system is foolproof.
No technology eliminates all point of sale fraud and chargebacks. However, if you want to investigate state-of-the-art customer identification technology, faster electronic point of sale transaction times, an easy way to manage loyalty programs and an additional noncash payment option to offer your customers, then biometric fingerprint scanners at the point of sale might be identification and payment solutions to pursue.