GE Consumer Finance says it is pilot testing machines that would let retailers extend credit to shoppers as quickly as 30 seconds with little more than the swipe of a driver's license.
The test is the next step in the General Electric Co. division's effort to shorten turnaround times for store credit card applications.
This month it finished installing self-service credit kiosks in all of Inter Ikea Systems BV's 26 Ikea furniture stores in the United States. GE says those kiosks take two to five minutes to approve an application and dispense a temporary pass that can be used immediately to make purchases. (The card comes in the mail later.) Ikea's old paper-based process took 20 to 25 minutes.
But Margaret Keane, the president and chief executive of the GE division's retail credit card unit, said in an interview this week that the machines it is now testing, about the size of a computer keyboard, can reduce approval time to 30 to 60 seconds. They determine the customer's name, address, birth date, and license number, and then cross-reference that information with the credit bureaus.
The process is not totally automated - customers must provide their Social Security and primary phone numbers. Ideally, the license terminal would be self-service, like the Ikea kiosks, but it could be put at a checkout counter so that a clerk could help the customer use it, Ms. Keane said.
"All retailers are looking to be more efficient, more cost-effective, and make sure their associates are focused on selling their goods," she said. "So wherever we can make the process easier, it always benefits the retailer."
Susan Bishop, a spokeswoman for GE, said Wednesday that it has been testing the license-reading terminals at in-store table events since at least October, but no retailers have committed to installing them. The tests will continue through the first quarter, she said.
GE is working with "almost all" its major private-label customers to test the terminals, Ms. Bishop said, but she would not name any of the retailers involved, nor would she identify the vendor that makes the terminals. (GE has private-label relationships with retailers such as Gap Inc., Lowe's Cos. Inc., J.C. Penney Co. Inc., and Wal-Mart Stores Inc.)
Rich D'Amico, a regional marketing manager at Ikea, said it hopes to incorporate the license technology into its kiosks early next year.
When the kiosks were being developed there was no consistent way to extract information from licenses issued by different states, he said. That issue was resolved just before Ikea's rollout of the self-service kiosks, but not in time to incorporate the new technology, he said.
"We took what we thought was right for us right now," Mr. D'Amico said. "We are working with them on other technological upgrades, and when they become appropriate, we will definitely take them on."
Bruce Cundiff, a research analyst for Javelin Strategy and Research of Pleasanton, Calif., said he was unaware of anything like the license terminals, which sound promising.
"If you can lessen the burden on employees and make it as easy as a swipe, then it's fantastic," he said.
However, Mr. Cundiff also said GE might face a security hurdle, because there has been concern about how easy it is to get a driver's license in some states.
If GE "can be sure of minimizing fraudulent applications and transactions, then it makes sense from an efficiency perspective," he said. "That's the balance it really has to worry about."
(Target Corp. is said to be using a similar system in some stores. Spokespeople did not return phone calls by press time.)
Ms. Bishop said GE does not see any incremental fraud risk with the new technology. In fact, the company believes the technology may enhance security, because the terminals would be able to identify fraudulent licenses that used an incorrect data format, she said.
For now, the technology works with licenses and IDs issued by at least 44 states, according to Ms. Bishop. One state, Georgia, encrypts the data and will not release the key, she said, while Michigan and other states do not put the information GE wants on the license bar code or magnetic stripe, and a few states will not allow the information to be read for commercial use.
GE's partnership with Ikea, announced this year, marked the retailer's return to the private-label credit card market. Ikea's partnership with HSBC Holdings PLC ended two years ago.
Each Ikea store has five or six self-service kiosks. They display instructions in English and Spanish and have phones connected to GE's customer service group. In addition to Social Security and phone numbers, customers must enter their name, address, e-mail address, driver's license or state identification number, and mother's maiden name.
No information is stored at the kiosks, which are connected directly to GE's back-office operations. GE offers similar terminals at Wal-Mart stores.
GE was the top private-label store card issuer last year, with a market share of 37%, according to the newsletter The Nilson Report.
