NCR Corp., the world's leading automated teller machine maker, has agreed to distribute biometric security technology from Sensar Inc.

The deal, for which financial terms were not disclosed, lends credibility to Sensar's patented system for verifying customers' identities by their irises.

The agreement is also a sign that the financial services industry is warming to identification processes based on unique physiological characteristics.

"The research that we've done suggests that some (companies) are willing to pay quite a bit of money for this," said Per-Olof Loof, senior vice president in NCR's financial systems group. "We're betting that this is one biometric that will be a good substitute or replacement for personal identification numbers."

Dayton, Ohio-based NCR is the third company in recent months to make a commitment to Sensar, Moorestown, N.J.

In April Citicorp paid Sensar $3 million for preferential access to its iris recognition product, Irisident. Last October Oki Electric Industry Co. of Japan acquired exclusive rights to sell Irisident in its home country, plus nonexclusive rights to sell the product in 10 other Pacific Rim countries.

Citicorp and the two vendors plan to use the product in self-service terminals, including ATMs.

"It is not impossible that we would get involved in some other applications for this-in the branch, for instance," said Mr. Loof. "But at this point, the main focus is on the self-service activities."

The Irisident system would locate the ATM customer's eye from a distance of up to three feet. It would capture an image and compare it to a master file. If a match is found for certain measurements between points in the iris, the user is granted access.

NCR said it plans to continue experimenting with a variety of biometrics, including those based on fingerprints and voices.

NCR is working with Sensar engineers to reduce the cost of Irisident and better integrate the technology into its terminals. The ATM maker expects to release a product using Irisident in the fourth quarter.

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