Did Radio (Waves) Kill The Biometric Star?

Written by Evan Schuman
September 6th, 2007

In another unintended consequence example, contactless payment and mobile payment efforts seem to have stunted the growth of retail biometrics. Is this a marketing fault or the death of an idea that never had much of a chance?

A few years ago, retail biometrics had what seemed to be a very bright future.

They promised superior security and a permanent CRM association. If that customer switched credit cards, moved to another state, changed their name and changed cellphone companies, the fingerprint would still allow all purchases to be associated with an individual customer.

But in making its case to retail managers, biometric vendors?particularly market leader Pay By Touch (which had the distinction of having purchased the infamous CardSystems, of data breach fame)?didn’t stress security or CRM. Marketers opted to focus on biometrics as the world’s coolest line-buster.

Their argument was that retailers could do without the delay of customers reaching into their wallets or purses to pull out and swipe a credit card. Instead, a customer would simply scan their finger and they’d be authenticated and associated with whatever credit card they had on file.

But things started to unravel. Some well-publicized retail deployments?such as the Piggly-Wiggly grocery chain–began to feel the pain of consumer resistance.

There were other setbacks for the biometric folk, such as their having settled on fingerprinting, the least accurate of the major biometric methods, although it was the cheapest and a method that some argued would be seen as less intrusive than retinal scans, voice print or face shape.

But the biggest problem turned out to be the one few anticipated. The surprisingly rapid acceptance of contactless payment credit cards essentially usurped the speed/convenience argument away from the biometric people. Current contactless payment devices are almost as fast as a finger swipe and next-generation longer-range versions expected next year could easily be even faster.

Mobile payments also added to the biometric problem, although the mobile payment approach of an RFID chip embedded inside a phone really turns that phone into a contactless credit card with ringtones.

The biometric folk can’t easily go back now and start touting security, CRM or any of their other advantages. Biometrics still has a very robust future in many verticals outside of retail. Indeed, even within retail but outside payments (think timecards, approvals and shipment acceptance).

Biometric retail marketing is an awkward position because they chose to tout an advantage that they couldn’t?no pun intended?secure. It’s somewhat reminiscent of how early RFID marketing has made life much more difficult for today’s salespeople trying to sell RFID into retailers and manufacturers.

There’s a lot of retail IT talk today about RFID trials failing. But for many of those trials that are supposedly “failing,” the chipsets are performing fine but they are being tested for the wrong things. When tested more realistically, even the classic low read-rates are sharply improving.

But retail is only testing RFID based on what RFID vendors touted, in terms of ROI and efficiency. Remember the arguments against the mainframe in the early 90s? The mainframe did quite a few things better than anything else, but it was being unfairly compared against machines that were designed for entirely different functions.

Was chatting with IHL President Greg Buzek on Thursday about some industry trends and we started talking about biometrics. Buzek said he never thought that would fly, but because consumers wouldn’t accept them. After having been conditioned by television and movies that fingerprinting is what happens to criminals when they’re arrested, he simply didn’t see it getting mainstream consumer acceptance.

Ironically, my family had just returned this week from a 10-day vacation to Disneyworld in Orlando, Fla. (Note: If you’re seeking a relaxing vacation to recharge your batteries, I can now counsel you that going to Disneyworld with a 9-year-old in August with a 109-degree heat index is not one of your better choices.)

I mention Disneyworld because they’ve been using fingerprint biometrics at the entrances to all of their parks and I was impressed by how well it worked. (Yes, I tried to trick the machine. It caught me.) Was even more impressed with how willingly consumers from around the world submitted to the biometric frisk.

Does this mean that consumers will accept biometrics more willingly than we thought, I asked Buzek. Nope, he said. Disney is an extreme exception, having spent decades building up consumer trust levels in the Walter Cronkite neighborhood.

Supermarkets, he said, are simply not going to ever get that. True enough, although in fairness, Disney will never sell me a TV dinner.

This all gets back to expectations and how powerfully marketing sets them. And with both biometrics and RFID, those initial expectations are dictating success and failures in remarkably inflexible ways.

Question for vendor marketing execs: When you’re deciding capabilities to tout, do you project what alternatives will likely tout four years down the road and think about likely trial requirements? Or do you focus on what’s going to sound best on a PowerPoint slide and in a brochure? Sadly, I think we both know the answer.


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