Can 'pay with your palm' biometrics help break Sweden's card addiction?
Swedish startup Quixter hopes to carve out a niche in the payments industry with terminals that can let shoppers verify their purchase by scanning the veins on their palm. It might not persuade everyone to ditch their cards or cash, but it could be a way to speed up the time consumers spend at the till.
The potential of biometrics for payment authentication has been watched more closely since Apple included a fingerprint reader on the iPhone 5S. As a payments tool however, it's not that useful yet, since it can only be used to approve purchases made from iTunes and Apple's App Store.
Samsung's Galaxy S5 fingerprint sensor holds more promise. With support from FIDO alliance member PayPal, it will let users authenticate PayPal payments online and in some stores with a swipe of their finger.
And then there's NFC, the contactless payments system that's been included in mainstream devices for around a decade. While NFC is now supported by some banks for low-value in-person transactions, it hasn't really caught on as far or as fast as expected.
Nonetheless, many are looking to the smartphone as the tool that will finally sound the death knell for cash, but is such an outcome likely in the near term?
Quixter's founder Fredrik Leifland thinks not. The company has packaged Fujitsu's PalmScan vein readers into terminals designed to be integrated with point of sale systems used by small retailers.
Instead of using a card, cash, or smartphone to pay for a purchase, the buyer places their hand a few inches over the Quixter unit to authorise the payment. The funds are then taken from the user's Quixter account.
"You only need a palm to pay — you don't forget your hand and there's no secret PIN code," Leifland told ZDNet.
According to the company's founder, completing a transaction with Quixter takes five seconds and is faster than cash and cards. He came up with the idea while waiting in a queue at a supermarket and was reminded that paying can be a complex process.
It's been a year since Leifland launched Quixter and he says it's installed at 15 stores located around campus at the University of Lund in southern Sweden and there are 1,600 Quixter users now signed up.
Leifland now hopes retailers in Sweden will install the system in exchange for a small percentage on each transaction.
Quixter isn't the only company to have applied palm biometrics to payments: US company Biyo (formerly PulseWallet) is also using Fujitsu's technology, for example. Its take is a little different though, since it's focusing purely on authenticating transactions after the user swipes their card at a pay terminal.
In Quixter's case, there are no cards since the source of the funds is a Quixter account. Using a feature of Sweden's BankGiro system, the company direct debits a registered user's bank account twice a month. The most a user can spend using their palms is 2500 SEK ($379) every 14 days, making it similar to stored value cards.
As for the security of the system, Leifland argues it's superior to fingerprint biometrics since people can't leave their vein marks behind, whereas fingerprints can be recovered from surfaces the user has touched. According to Fujitsu, PalmScan has a false reject rate of 0.01 percent while its false accept rate is 0.00008 percent. And the system only reads palms with blood pulsing through the veins, so even if a shop attendant somehow misses recognising a dead person's hand at the till, it still wouldn't be much use for authentication.
Systems like Quixter it might provide an answer to a different problem in Sweden: the habit of using cards for low-value transactions even when paying with cash would be faster.
In Sweden, cheques are dead and cards are increasingly used even for low-value payments. It's not hard to find long queues of commuters at news agencies in Stockholm's metro network, stuck behind a person inserting their card, waiting for it to register, and then typing in their security code — all to buy a low-cost ticket or soft drink. While cash would be quicker, it's just become common practice to use a card.
Leifland claims the pay-by-palm system is quicker than both card and cash payments. If the system finds more widespread acceptance in Sweden, such queues could end up a thing of the past.