Frank A. Petro Jr. plans to offer the convenience, reliability, and ubiquity of the automated teller machine to millions of Americans who do not rely on banks.

Mr. Petro, president and chief executive officer of Innoventry Corp. of San Francisco, says his company's check-cashing machine -- which identifies customers by facial characteristics, not a card or a personal identification number -- will reshape financial services for the group he calls the "self-banked."

Aiming to become a national brand, Innoventry plans to deploy 5,000 of these self-service machines in 30 U.S. cities by yearend 2001. The company is controlled by Wells Fargo & Co. and Cash America International Inc. -- each with 40% stakes -- and the employees own the rest.

"We're looking to create kind of a New Age financial institution," Mr. Petro said. "Some people like to use the word 'revolutionary.' "

Mr. Petro's revolution comes in the form of an ATM that can be used conventionally or, by people without bank accounts, in a way that relies on face-recognition technology, this company's chosen method of biometric identification.

On the first visit, a customer takes three to five minutes to enroll, using a phone at the machine to speak with a call center representative. The customer answers a few questions (mother's maiden name, previous address, etc.) and the machine takes a photo. On return visits, a new photo is taken and compared with the running record of photos recorded by the company.

"The machine actually creates a grid based on the bone structure of your face," Mr. Petro said.

Customers must enter their Social Security numbers each time. If they do not have one, a driver's license number can be used, or a number can be assigned to them.

The machines, called Rapid Pay Machines, or RPMs, use technology originally developed to control access at the Pentagon, the company said. So far, 350,000 people have been enrolled. "As far as I know, we are the largest deployer of a biometric solution in the United States," Mr. Petro said.Some banks have been experimenting with identification by voice, fingerprint, iris scan, or hand geometry. Last summer, for example, Bank United Corp. of Houston rolled out some ATMs that use iris recognition technology from Sensar Inc., but do not serve people without bank accounts.

More than 40 million adults in the U.S. either do not have a bank account or do not rely on banks for routine transactions, according to statistics cited by Innoventry. The "unbanked" spend roughly $8 billion a year on check-cashing, money orders, money transfers, and other financial services.

Innoventry bills its system as one that treats the unbanked with dignity. The RPM will charge different fees for different types of checks, but on average, will deduct slightly less than 2% of the face value, Mr. Petro said.Fees for bill payments and money orders will be on par with market rates or slightly lower, and Innoventry's money transfers will be a "considerably better value than going to a Western Union-type competitor," he said.

Innoventry, formerly Innovisions, was created in 1998 as a joint venture of Wells Fargo and Mr. Payroll Corp., then a subsidiary of Fort Worth, Tex.-based Cash America International, the world's largest pawn shop chain. Earlier this year Mr. Payroll was blended into Innoventry.

In 1997 Mr. Payroll had introduced what it said was the world's first self-service check-cashing machine. Similar to the RPM, the Mr. Payroll-branded product doubled as a regular ATM and used facial recognition.

Wells Fargo, which runs a sizable business supplying cash machines to casinos, expressed interest in using Mr. Payroll's biometric approach. Though it built and will continue its product line for the gaming and entertainment industry, the venture has shifted attention to retail locations.

Mr. Petro, 57, had been executive vice president for strategic development at Wells Fargo, and has led the joint venture from its inception. In a year the company has grown from 10 to 240 employees. It has contracts for 1,179 Rapid Pay Machines and expects to announce agreements for as many more in the next month.

Innoventry inherited 100 Mr. Payroll check-cashing machines that had been scattered around the country in a pilot. The RPM is a souped-up version of the original. The first two RPMs have been installed in Dallas, and 175 more will follow by yearend in Houston, Dallas, and Phoenix.

ATM manufacturers Diebold Inc. of Canton, Ohio, and NCR Corp. of Dayton, Ohio, are supplying the major parts. Visionics Corp. of Jersey City and Miros Inc. of Wellesley, Mass., provide the biometric technology.

Innoventry aims to keep costs down by minimizing the number of transactions that require human intervention. At existing machines, 60% of transactions are completed by technology alone, Mr. Petro said, and 40% represent enrollments or transactions that require calls to customer service.

New hardware and software are meant to improve reliability. The check readers in Mr. Payroll machines jam once every 300 times, Mr. Petro said, while the new machines have a failure rate of 1 in 10,000.

Another new feature is a second screen that can display customized promotional messages, public service announcements, instructions about using the machine, and even news or soccer scores.

By next year Innoventry plans to add money order, electronic bill payment, and money transfer services, Mr. Petro said.

Some Mr. Payroll machines -- to be upgraded to RPMs in the next six to nine months -- are located in K-Marts. More recent deals include a five-year rollout of 1,000 machines in Circle K convenience stores, and one for 179 machines in Kroger Co. supermarkets.

Mr. Petro said some immigrant populations may harbor negative views of financial companies because of bad experiences they've had elsewhere.

"What we hope to do is establish that level of trust and reliability," said Mary Burczyk, Innoventry's senior vice president of corporate marketing and communications.

John P. Caskey, an economist and professor at Swarthmore College, said the check-cashing machine market is unproven but that Innoventry's sounds like "a promising innovation."

Mr. Caskey said Innoventry should emphasize convenience and lower fees, and could consider putting RPMs in hospitals, hotels, or other places that employ low-wage workers but probably would not support a check-cashing outlet.

Henry F. Shyne, executive director of the National Check Cashers Association in Hackensack, N.J., said his membership -- which includes 1,300 check-cashing and related businesses with 3,500 locations -- is not concerned about automated replacements. Check cashers view themselves as "neighborhood financial service centers" that not only offer money orders, but also bill payments and money transfers, sometimes even car registrations, Mr. Shyne said.

Most customers prefer to deal with humans and may not feel safe getting cash from an unmanned location, Mr. Shyne said. As for speed, he added, consumers can wait in a line for a machine just as they can in a store.

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