Biometric payment systems beginning to catch on in US

The touch of a finger may replace the swipe of a credit card in a new payments systems that backers say is growing rapidly in the US and has potential around the world.

Some and consumers are giving rave reviews for the new system, in which customers use a finger scan to authorize payments from bank accounts.

"Every day we install new merchants -- grocery stores, car washes, chiropractors," said Tim Robinson, president of BioPay, which has some two million US customers enrolled and claims to be the largest company offering biometric payments.

For customers, Robinson said, "there's a cool factor" and for merchants, "it's cheap" because the system generally avoids credit card fees by drawing payments directly from bank accounts.

Rival Pay By Touch, based in San Francisco, has signed up major retailers including the Piggly Wiggly grocery chain and is in talks with "the top 100" US retailers and Britain's Co-op retail group, said marketing director Shannon Riordan.

"The more pilot programs we have, the more people are calling us," Riordan said.

"This is being driven by convenience. You don't have to dig for a wallet or a purse. The other big advantage is security, since everyone has a unique fingerprint and no one sees your [credit card] number."

Analysts US consumers are largely receptive to the system, which requires customers to register with a fingerprint scan and then link a bank account or credit card to a merchant account.

"Our goal is to provide the convenience of a secure, wallet-less world where a person can go out for a walk to buy a coffee or an ice cream without having to carry a heavy wallet or purse," Robinson said.

"We also believe that retailers pay too much in credit and debit card fees and BioPay solves that problem."

Robinson he expects to expand internationally, but noted that there are obstacles including certain European privacy laws that prevent firms from storing certain customer data.

BioPay Pay By Touch are both privately held and do not release financial data. They are currently in litigation over patents for technology.

Kush Wadhwa of the International Biometric Group, a market research firm, said his firm projects sales of US$68 million for biometric point-of-sale equipment this year growing to US$243 million by 2008. The majority of this is in the US.

"The public is quite receptive as along as there is a clear and compelling value," Wadhwa said.

The consumer and merchant benefit from convenience and speed as well as greater protection against fraud, the analyst said.