The Miami Herald

At the front: Visitors meet firm's scanners

Scanners from a Palm Beach Gardens firm are recording fingerprints to allow the tracking of visitors to the U.S.

January 7, 2004
By Beatrice Garcia

As U.S. immigration officials embarked this week on a massive plan to electronically fingerprint and photograph tens of thousands of visitors coming to the United States, a South Florida company is right in the midst of this new program.

Cross Match Technologies designed and developed the fingerprint scanners being used in 115 airports and 14 seaports around the country as part of the $300 million-plus U.S.-VISIT program.

For the small privately held company founded in 1995, this latest contract with the Department of Homeland Security is ''the tip of the iceberg,'' said Theodore Johnson, Chairman and CEO of Palm Beach Gardens-based Cross Match.

The specifications for the biometric scanners used in this program, which capture the two index fingerprints from foreigners entering the U.S., were based on the Cross Match's Verifier 300 LC scanner. This small scanner catches a single fingerprint at a time and uses an USB interface to connect to a desktop or laptop.

But the federal government and such law enforcement agencies as the FBI, the U.S. Marshal Office, the Secret Service, the Army and the Air Force are already big customers for Cross Match. These agencies use a bigger scanner, one that captures all 10 fingerprints at a time. Such major corporations as Banc One, Fidelity Investments and Citigroup are also clients.

Cross Match sells its products in 40 countries, though Johnson said that for such a small company, volume isn't huge right now.

''But that's how it starts,'' he added.

The company designs a variety of digital equipment used for scanning, storing and processing fingerprints and palm prints. Cross Match has achieved 1000 dpi (dots per inch) resolution on its digital fingerprints, giving them greater detail and thus facilitating fingerprint identification.

The Sept. 11, 2001, terrorist attacks heightened the interest in security measures and increased demand for products made by companies like Cross Match. The company has nearly doubled its staff to 165 since then. Two-thirds of its employees are engineers, as were the three founders of the firm, which moved into larger quarters recently.

The company operates in much the same manner as computer manufacturers. It designs, assembles and markets its products. The production of the parts is outsourced.

Cross Match ranked No. 5 on Inc. magazine's list of the 500 fastest-growing small companies in the country last year. Between 1998 and 2002, revenue shot up 11,517 percent, to $24.5 million from $211,305.

Johnson said the company has raised about $40 million from angel investors all over the world since it inception. A former Painewebber executive, he is an investor and has helped with its financing activities.

For companies like Cross Match, the Department of Homeland Security's use of biometric scanners for fingerprinting and photographing foreigners as they enter the country is a huge opportunity.

''This is the most high-profile deployment of biometrics to date,'' said Trevor Prout, director of marketing for the International Biometrics Group, a New York consulting firm.

In a November 2002 report, the National Institute of Standards and Technology, a federal science agency devoted to standardizing technology, recommended biometrics as the best to secure the nation's borders.

International Biometrics estimated the size of the market for biometric security products at $928 million. The firm expects expansion in the market to $4.35 billion by 2007.

Johnson, Cross Match's chairman, said the company has been able to win market share in this rapidly growing arena because it can compete on pricing and product development.

He said that pricing has dropped by half -- $20,000 to under $10,000 for the 10-print scanner -- and that the unit size has shrunk dramatically since Cross Match started selling its scanners.

Besides all the security applications for its products with law enforcement and government agencies, Johnson sees huge opportunities in the commercial arena as corporations use fingerprint scanners and smart cards with embedded digital fingerprints for identification purposes.

He also sees new business areas for the company. One is a new division that will actually do the background checks, take the fingerprints and do the drug testing for any company or agency that needs these services but doesn't necessarily have the staff or expertise to carry them out.

They can outsource them to Cross Match.

''Pretty slick,'' Johnson said. ``This could be a huge business.''