Security-conscious banks can now go beyond passwords, PINs and signatures to biometric keystroke-rhythm identification or voice verification with BioShop, which officials claim is 100 percent accurate. And banks can combat Web fraud with the same tools for a private-branded e-credit card.
The BioShop suite of TouchCredit Financial Services, which claims to be the only firm offering a device-agnostic software platform for biometric verification, gives banks, merchants and credit card issuers "the ability to create an indelible bond with their customers by biometrically safeguarding and simplifying on-line purchasing all from a simple touch of one's finger, sound of one's voice or smile on one's face," says James Uberti, the company's chairman and founder.
The suite, in development for 18 months, was rolled out this spring with only two biometric identification options-keystroke rhythm identification and voice verification-which require existing hardware like keyboard and microphone. However, other devices like a finger scanner, biometric mouse or Web camera, also are available. Uberti suggests banks could increase customer loyalty and boost account acquisition by offering one of those devices-finger scanners now wholesale for $80 but could drop to $40 by 2004-to clients who, for example, transfer their balance from a competing bank.
On-line credit card fraud has been a headache for banks, credit card merchants, payments processing and Web merchants for as long as the Internet has been replacing the shopping mall. Uberti says financial institutions, e-merchants and payment processors are eager to quell consumers' fear about on-line shopping by providing a secure payment solution that doesn't complicate the payment process. According to a Yankee Group study, enhancing the security of the on-line purchasing process can increase sales by 23 to 28 percent.
A sister product, BioApp, is aimed at payment processors, which include about 20 in the U.S. alone. Last month, the Long Beach, CA-based Electracash licensed the authentication technology for real-time account-holder verification. The check-processor for on-line merchants will use the software as part of its check-processing system, whose 500 clients can choose any of the three verification options. On-line check payment is growing rapidly: A recent American Bankers Association study predicts this payment method will leap by more than 75 percent in the next 10 years, three times faster than credit card growth.
BioShop is integrated at the bank site and BioApp is integrated at the Internet merchant's site. The biggest cost of on-line fraud isn't for the bank, but the payment provider, who most often bears the brunt of fraudulent charges, says Bond R. Isaacson, co-CEO of Concord EFS, a Memphis-based electronic transactions and payments provider. Says Isaacson, who is on the TouchCredit board: "Any time you do a change at the point of sale, the payment provider is going to ask, 'Does it cut my risk?'"
Although two large financial services firms and several credit card companies-Uberti wouldn't identify them-have beta-tested BioShop, he says none believed the "timing was right" to adopt the technology, a factor he finds frustrating. "Banks are looking at this and trying to make things work, and they're asking themselves, 'Do consumers want it?'" says Isaacson, a former payments executive at Bank of America. "A lot of people are saying, 'How is this going to work?'," he says. "But somebody has to set some standards first. If you had one or two large merchants buying into this, you'd see it adopted pretty quickly."
Unlike other verification programs that require both merchant and user to sign up, an on-line store doesn't have to be a "member" of TouchCredit to accept a bank credit card using the technology.
Today's most common credit-card verification service, "Verified by Visa," requires both merchant and cardholder to register on-line, and allows the consumer to use a personal password to protect card numbers against unauthorized on-line use. Once the card is activated, it can't be used without the password. The program, launched in December 2001, now includes 1,500 merchants worldwide, including 124 in the U.S.
However, with identity fraud the nation's fastest-growing white-collar crime, consumers are as eager as banks to embrace the technology. A recent U.S.-government-funded survey by Search.org notes 85 percent of consumers would accept the use of biometrics to improve the security of credit card transactions. As many as 78 percent indicated they would agree to the use of biometrics in making ATM withdrawals. Indeed, five percent of respondents had already given a measurement for biometric comparison. For Uberti and his company, the future is now.
