Think Computer Corp. has introduced a digital-coupon system integrated into its mobile-payments application that relies on facial recognition to confirm a user’s identity at the point of sale to help combat payment fraud.
The Palo Alto, Calif.-based company is offering merchants an advertising model called cost-per-action in which they pay for a coupon only if two requirements are met: consumers must redeem the coupon through the FaceCash mobile app, and they must complete a purchase using the coupon.
“Advertisers don’t have to pay for ads that don’t work,” Aaron Greenspan, FaceCash founder and CEO, tells PaymentsSource. “We get to collect a higher premium per coupon used because we can guarantee that it resulted in a sale.” Greenspan would not reveal the premium.
FaceCash established what it deems “a simple” merchant-fee structure based on a cost-per-action model. The merchant fee on coupons used by repeat FaceCash customers is 30% of the coupon’s value. For new customers using coupons, the merchant fee is 50% of the coupon’s value.
Think Computer is running a promotion through Feb. 28 and is treating all coupons as though they were used by repeat customers.
“The real question is why no one else has [used this model before],” Greenspan says. “Generally, the answer is that no one else has the technology to track everything as accurately as we do.”
Consumers using the FaceCash application first must register online and link their FaceCash account to a valid bank account. To initiate a payment, the user accesses the barcode needed to complete a transaction from the FaceCash account on the app’s home page. The barcode also contains the user’s digital image uploaded during the account-registration process.
After the clerk scans the barcode, the user’s image appears on a computer screen that is part of the merchant’s POS system. The merchant uses that image to verify the customer and complete the transaction.
Think Computer routes the transactions through its internal database and not the automated clearinghouse system. The database moves funds between the user’s account and the merchant’s account. The company holds consumers’ funds in a prepaid account and uses those to settle the transaction. Think Computer sends nightly batches to the merchant with each day’s earnings.
The coupon system initially is available through an Apple Inc. iPhone app. Think Computer soon plans to release updated apps for Research in Motion Ltd.’s Blackberry phones and those powered by Google Inc.’s Android mobile operating system.
Some 10 Palo Alto merchants, mostly restaurants, accept FaceCash (
“Most of the merchants we have signed up already have expressed an interest in listing coupons,” Greenspan says. Some merchants already have entered coupons into FaceCash’s system, he adds.
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