The Sacramento Bee

Retailers look to finger scans

Checking IDs could get more reliable with biometric tools

January 25, 2004
By Alison apRoberts

Biometric devices -- which confirm identification by measuring biological or behavioral features -- have been a staple of police work and science-fiction movies for decades. Now they're moving into the everyday world of airports, workplaces and corner markets.

In the Sacramento area, finger-scan identification systems are showing up in growing numbers at check-cashing windows, many within grocery stores. And in the future, expect to see them at cash registers, allowing customers to pay for goods as well -- no ATM card or wallet needed.

The most common biometric measure is fingerprints, but some devices also identify based on a retinal or iris scan, a face or voice. Biometrics promises identities that promoters claim are virtually impossible to steal, impersonate or misplace (the movies "Gattaca" and "Minority Report" notwithstanding).

"Some type of biometric is the only way we'll be able to reliably identify anyone," says Sgt. Greg Fox of the Identity Theft Task Force at the Sacramento County Sheriff's Department. "You can take my name, but you can't take my print."

But critics contend biometrics moves us closer to a world of Big Brother.

"Biometrics is a technology that has a lot of potential that's bad for privacy, although a lot of people consider it a silver bullet," says Lee Tien, an attorney with the Electronic Frontier Foundation, a privacy advocacy group based in San Francisco.

To Valen Lee, biometrics seems like a business-saver for merchants fighting bad checks.

Lee works at his family's grocery store, Lee's Food King, on Franklin Boulevard in south Sacramento. Bad check losses at the store's check-cashing window hit about $30,000 during 2002. "We had to do something," Lee says.

He installed a finger-scan identification system a year ago. It cost about $10,000 for setup and about $80 a month for data and support service for the system.

Now, more than 5,000 transactions later, the system has more than paid for itself by reducing the store's bad-check losses by at least two-thirds.

Lee bought a system from BioPay, a Virginia company that is one of three major players in the U.S. check-cashing and point-of-sale biometric market. BioPay is the only one of the three with customers in the Sacramento market.

Customers enroll in the BioPay system by scanning both index fingers, swiping a driver's license, handing over a personal check and having a picture taken by a small Web cam. The procedure takes a couple of minutes at most.

After initial enrollment, you can return without identification, place a finger on the scanner to pull up your identification on a monitor for the cashier, and cash a check. The account information is stored at the company headquarters and not shared with others, according to BioPay.

There are about 20 Sacramento-area merchants using BioPay for check-cashing, says BioPay sales representative Bill Souza. They include the M&J Market on Auburn Boulevard and the Market Basket store in North Sacramento.

BioPay is rolling out a "bCheck" service that allows customers to pay for goods by using a finger scan like a debit or credit card. Some stores in Washington, D.C., are using it now. Lee says he would like to try it out in his checkout lanes in south Sacramento.

BioPay's prime competitors, which also use finger scans, are Pay By Touch in San Francisco and Biometric Access Corp. in Texas.

Pay By Touch has a payment system in a Seattle Thriftway store with about 3,000 customers registered on it, says Caroline McNally, the company's chief marketing officer. Pay By Touch, having completed a $10 million financing round last fall, is now going after national clients, including a video-store chain.

McNally and others say the biometric systems are becoming more affordable. For instance, fingerprint readers cost more than $1,000 a couple of years ago; now they run less than $100.

Customer acceptance may be rising as well in a post-Sept. 11, 2001, world where security is a growing concern.

"I think the time is right for this now. I think consumers are more ready to accept it," McNally says.

Certainly, such systems are becoming more visible. Sacramento International Airport is among the 115 airports and 14 seaports that participate in the federal US-VISIT program, which now requires many foreigners to have finger scans and digital photos taken as they enter the country. The information is compared electronically to criminal and immigration databases.

But it is life at the office that will drive widespread acceptance of biometrics, predicts Trevor Prout, director of marketing for the International Biometric Group, a consulting and research firm in New York. "I think people will become more comfortable with these technologies through the workplace," he says.

Biometric checks on time and attendance, as well as PC network access systems, are a growing market in biometrics, according to IBG.

Such workplace systems were the first marketed by Biometric Access Corp., says CEO Ron Smith. Recently, his firm has expanded into check cashing and retail sales.

Although the retail/ATM/point-of-sale slice of the worldwide biometrics pie is small -- $16.1 million of a total $719 million biometric revenue in 2003 -- it is expected to grow at a faster pace than most of the biometrics market.

The only other biometric category in which revenue is expected to grow at a faster rate is "device access" to restrict access to wireless phones, PDAs and the like.

Total biometrics sales are expected to jump to $4.6 billion by 2008.

But key to growth is selling customers on the idea that biometrics offers privacy protection rather than privacy invasion.

"It really helps the consumer protect their personal and financial information," says Smith of Biometric Access Corp. "They don't have to tell a clerk anything or show a clerk anything."

But Smith knows not everyone will be sold.

"There are some people who don't like it," he adds. "They feel it's Big Brother. I think as far as buying groceries it will always be an option to participate or not participate."

You won't find Tien of the Electronic Frontier Foundation signing up to buy his groceries on such a system.

The potential misuse of biometric data is "inherently creepy," Tien says: "It can be surreptitiously captured, and someone can plant your biometric; you don't have control of it. Suppose I lifted your fingerprint off a cup, I could arrange to place it somewhere else."

Those in the biometrics industry say their stored prints use a template system that prohibits reverse-engineering to create a full fake fingerprint.

But if somehow your fingerprint were stolen, it would be harder to replace than a Social Security number or password, Tien says.

Tien concedes that biometric systems can be convenient, but they don't deliver the security or reliability they sometimes promise. Worst of all, Tien says, biometric use could pave the way to greater losses of privacy.

"It's a slippery slope, leading down the road toward the acceptance of DNA (as a biometric)," Tien says.

"I don't know if it's more acceptable to people post-9/11, but the government has been much more interested in biometrics," he says. "That's the kind of thing that stimulates an industry. It also gives that legitimacy effect: If this is good enough for the FBI, then it's good enough for me."

At Food King in south Sacramento, Maggie Golston doesn't seem to feel bullied by Big Brother when she gives up a fingerprint to cash a check.

The 57-year-old Sacramento resident says she is happy to be part of a system that might help stop someone from impersonating her financially. About a year ago, her purse was stolen, and she spent countless hours unraveling bad charges on her credit cards.

"You see about it on TV, but you don't know what it's like until it happens to you," Golston says. "I don't mind this at all."