The idea hit Colin Hendrick while developing technology in the federal government's efforts to shore up identity technology as part of homeland security.
"We saw the potential for this kind of thing in the banking and finance industry," says the CEO of SmartMetric, which has developed a biometric-based identity card that serves as both a security pass and credit card. "We particularly saw its potential for transactions of an electronic nature."
Hendrick says the idea behind the card is to allow users to access their checking accounts electronically by using the card, then subsequently transfer cash onto the card. The card can then be used for person-to-person money transfers, online purchases or other transactions. The user's fingerprint serves as the "username/password," which in theory makes the card as impenetrable to fraudulent use as is medically possible.
The firm doesn't have any financial customers yet, though Hendrick says he's "in talks" with three global institutions, and is also considering positioning the product as a payments alternative to financial institutions, a la PayPal. He says participating customers would buy the product as an ID theft protection tool, then choose which personal credit card they want to combine with the SmartMetric technology.
The firm developed the card by shrinking the size of a fingerprint scanner, and developing specialized silicon chips to create a paper-thin circuit board that contains more than 160 components that go into determining a consumer's ID. The card is powered by a rechargeable battery that resides on the card, with a charge lasting about two months. Users are notified of a low battery by a light that's on the card.
On the surface of the card is a fingerprint scanner. A user touches the scanner, which activates a sensor that matches the user's fingerprint with a prestored fingerprint that resides on the card. An array of personal information can be stored inside the card, such as log-in information, passwords, shipping addresses and other personal account information. That information is encrypted and can only be accessed by the specific fingerprint that's assigned to the card. Without the proper finger, the card can't work-either as a means of access or a transaction tool.
SmartMetric originally built its technology for use by the government agencies like the Department of Homeland Security, many of which were looking for ways to secure access to buildings, equipment and other facilities.
While he's yet to formally snare a bank, Hendrick's hope is that financial firms will find the ability to integrate access and transaction function an attractive and safe means of streamlining security for electronic transactions-with the added benefit of having the option of using the product as a way to manage employee access.
Market observers say the marketplace is new, and that any widespread use is in the future.
"I'm not aware of many products like this that are out there," says Ariana-Michele Moore, a senior analyst who's researching prepaid cards. Moore says that similar products have gotten some traction overseas, particularly in countries that don't have a lot of banks. She says that in the U.S., concerns over who's responsible for potential breaches could hold these kinds of products back. "If someone gets through the system, who's liable?"
Moore says what's made the technology a fit for government use, and could make it a decent fit for internal use such as employee verification, is its effectiveness in a closed loop environment. "If you are to blow this out to a general audience, there's less control," she says. "In the closed loop, where you can control everything, it's easier to dabble in biometrics."
