Evan Schuman's StorefrontBacktalk

“Who could have predicted that? People who want to buy a loaf of bread and eggs don’t want to have their finger scanned,” he said.

“The ultimate thing with biometrics in a consumer retail setting is it’s all about customer convenience. But why is biometrics more convenient? It’s really about preventing fraud—preventing fraud against Piggly Wiggly, not me. Why should I be inconvenienced to protect them? It ends up taking more time, has a greater error rate and doesn’t provide the consumer with anything they want.”

Rasch, who today serves as a senior vice president for security software vendor Solutionary, nicely sums up the issues behind consumer resistance.

“People just generally don’t want to give up fingerprints because they justifiably or unjustifiably believe there’s a database being created with their biometrics. This presents unique consumer concerns,” he said.

“It does provide the consumer with a little convenience?you don’t have to take your card out of your wallet and hand it to a cashier who has to swipe it. But … There’s this direct link to me, which presents privacy concerns, like, ‘Hey, what are they doing keeping a record of what I’m buying?'” Rasch said.

“Radio Shack asks for your phone number when you buy something. And people ask, ‘Why give a phone number just to buy some batteries?’ There’s the idea that there’s nothing in it for me and I’m giving up some privacy,” he said.

“What people don’t realize is if they pay by credit card, they already have your phone number. Those are short-sighted privacy concerns. Concerns should be more generic?that every time you pay by credit card, there’s a record. When it feels linked to you, there’s much more consumer resistance.”

Rasch also questioned the ultimate security of the system, and pointed to the permanence of a fingerprint ID, which significantly raises the stakes.

“There’s a whole bunch of problems with biometrics technology. It’s not nearly as secure as people think it is. You always have your biometrics with you. If the magnetic strip on your credit card is unreadable or if it’s stolen, you get a new one. You can’t get a new finger?at least not easily. So, that’s one big problem,” he said.

“The other problem with biometrics authentication is it’s one thing in a complicated system. It’s another layer where things can go wrong. If the sensor fails, you can’t read the fingerprint. Maybe 2 to 3 percent of the time when I present my credit card, it can’t be read. Someone can type in the number and if they can’t, I give another card. You don’t have that option with biometrics.”

As a practical matter, Rasch said, many retailers will deal with these concerns by making the system more lenient, so as to reduce the number of customers incorrectly rejected. But making the system more lenient decreases its security value.

“These things can be as sensitive or as insensitive as you want. Consumers don’t want to wait in line. So where you have high-volume transactions, you can create a lot of tolerance for false positives. And then I’m going to say, ‘If I’m 85 percent sure it’s this guy, let it go through,'” he said.

Avivah Litan, a research director at industry analyst group Gartner, said the future of biometrics is a question mark and Pay By Touch knows it.

“Pay By Touch is having some success in various grocery chains around the country, but they have had to diversify their offerings, for example by buying Cardsystems International, a payment processor, because their future revenue streams from biometric payments are still uncertain,” Litan said.

However, consumers will likely warm to biometrics and its use will increase, she said.

“Consumer surveys indicate that biometrics is a favored consumer method for authentication, and as long as merchants like Piggly Wiggly can use it to lower their own payment costs, I think we will see fingerprint-initiated payments continue to gain adoption,” she said. “The ROI for merchants is too compelling to ignore, as it gives them a lower-cost alternative to credit and debit cards.”

Consumer resistance, though, could be a deal-killer for biometrics unless the industry turns things around quickly.

“You can look for alternative payment systems, but you don’t have a lot of choices. There’s smart cards and biometrics. None of it is really viable in the market,” Gartner’s Litan said.

“There’s not a lot you can do if consumers don’t like biometric payments, unless there are some pretty big incentives. But then it’s not worth it. The whole reason Piggly Wiggly tried this was to reduce the cost of payments,” she said.

Piggly Wiggly’s Bolt defended the ROI of incentives, arguing that the incentives are short-term costs to get consumers to try the technology. If they try it and don’t want to keep using it, the experiment failed and it stops. If they like it and keep using it, the experiment succeeded and the incentives stop being offered.

Rasch pointed to data thefts?such as the recent announcement that Ameriprise Financial lost the financial data of some 158,000 clients and 68,000 advisers when a company laptop was stolen from an employee’s car?as giving another reason that biometric authentication should be evaluated very carefully.

“The privacy concerns are both perceived and real. The perceived concern is that there’s a database of my fingerprint. And if someone steals that database, they can commit crimes and have me blamed for it. That’s a perceived concern, not a real one,” Rasch said. “But there are real concerns with fraud and theft. Companies are always losing personal information. Imagine losing a database of biometrics. Those are much worse problems. I can get a new credit card. It would take a while to get a new finger.”