Scott’s is cashing in on finger scans

Remaining 14 Stores Up and Running After Positive Results from 4 Store Pilot

It’s no money, no plastic, no problem at Scott’s Food & Pharmacy locations for those who have arranged to debit their checking accounts with a fingerprint scan.

Scott’s is the first grocery-store chain in Indiana to implement the biometric payment service. Executives with the chain tested it in four stores early this month then rolled it out to the remaining 14 after they were satisfied with the results.

The new Pay By Touch technology is running now in every lane at all 18 locations of the area supermarket chain, and “people signing up have been very positive about it because it’s going to save them a lot of hassle,” said Rick Zahm, vice president for merchandising and operations.

Pay By Touch developed the system Scott’s is using to debit a shopper’s checking account via a secure finger scan, in the same way that swiping a debit or check card provides account access. The company says finger scans are more secure than paper checks or debit cards because the account numbers are not visible to anyone at the checkout lane, even store associates.

And it is the kind of technology that disappoints pickpockets, said Rod LaFleur, a Pay By Touch regional sales representative.“If you’re not carrying a purse or wallet, there’s nothing to be stolen,” he said.

Scott’s is the first grocery-store chain in Indiana to implement the biometric payment service. Executives with the chain tested it in four stores early this month then rolled it out to the remaining 14 after they were satisfied with the results.

Signing up for the free service requires a canceled check, a driver’s license or electronic benefits transfer card, and an initial finger scan.“If you took a fingerprint, there are certain points unique to each individual. That’s what is kept on file,” Zahm said. “The sign-up only takes about two minutes.”

The transaction generates a receipt without an account number and is quicker than a standard debit-card transaction, he said. The technology is in most major cities but hasn’t made it to Indianapolis yet.

LaFleur said Pay By Touch is operating at 2,400 locations in 44 states. A retailer pays between 8 cents and 10 cents per transaction, but that is less expensive than the cost of an average debit-card transaction, he said. The service usually boosts sales enough to more than cover its cost, he said. Pay By Touch drives sales because customers shop more when the line at the checkout lane moves faster and when spending isn’t limited by the amount of cash they’re carrying, LaFleur said.

Citibank Roll Out to Be Quick

This is the first time that Citibank has tested a biometric payment system, and the bank's operations in other countries, especially in Asia, are watching what happens in Singapore with interest, Cavale said.

"Our plans include taking this technology around the region," he said.

"Our intention is to roll it out very quickly to other cards," Cavale said.

Citibank chose to start the rollout of the biometric payment system with the Clear Platinum card because it is targeted at younger Singaporeans, ranging in age from 25 to 34. "We launched with this segment because the uptake is going to be very strong," he said.

Getting signed up to use the biometric payment system, provided by Pay By Touch, of San Francisco, is relatively easy.

Citibank has installed Pay By Touch kiosks at several Singapore branches

Citibank to Expand Pay By Touch Offering

Citibank this month began rolling out biometric payment systems in Singapore that allow Citibank Clear Platinum credit card holders to pay using their fingerprints and says they plan to expand the platform to other regions and other cards.

"It's an investment for our future," said Anand Cavale, vice president and business director of credit payment products at Citibank Singapore, noting this is the first time the bank has used a biometric payment system anywhere in the world.

Before putting the biometric system into operation, Citibank officials took a long hard look at whether the system was secure -- and came away satisfied that it was, Cavale said. "We see this as the next step, which will enhance our already good fraud prevention systems," he said.

With an affluent, tech-savvy population of 4.5 million, Singapore is among the most competitive for credit-card issuers, with many Singaporeans carrying three or four cards in their wallets. To encourage card holders to spend, banks regularly team up with partners to offer special discounts -- say, 10 percent off dinner at a trendy restaurant -- if customers use a certain credit card.
So much competition leaves banks looking for any edge they can find.

For its part, Citibank hopes the biometric technology makes payment more convenient for its card holders, eliminating the need for them to always carry credit cards while still allowing them to buy things. But don't expect to see biometrics replace Citibank cards any time soon. "The technology will be used in conjunction with a credit card," Cavale said.

Cavale believes biometric payments systems will shine in applications where a quick payment method is needed. "If you're running to catch a train, and buying a cup of coffee and a newspaper, your time has more value," he said.

So far, Citibank's biometric payment systems are only in place at a handful of outlets in Singapore, including local coffee shops and the popular Zouk night club.

The bank has plans to quickly expand the number of such systems and the number of Citibank card holders able to use them.

"Our intention is to roll it out very quickly to other cards," Cavale said. Citibank chose to start the rollout of the biometric payment system with the Clear Platinum card because it is targeted at younger Singaporeans, ranging in age from 25 to 34. "We launched with this segment because the uptake is going to be very strong," he said.

Getting signed up to use the biometric payment system, provided by Pay By Touch, of San Francisco, is relatively easy. Citibank has installed kiosks at several Singapore branches where card holders can register their fingerprints. To sign up, Citibank customers need to provide valid photo identification and a seven-digit numeric passcode used with the fingerprint to authenticate payment.

This is the first time that Citibank has tested a biometric payment system, and the bank's operations in other countries, especially in Asia, are watching what happens in Singapore with interest, Cavale said. "Our plans include taking this technology around the region," he said.

IBM Fortifies Pay By Touch Relationship

RALEIGH, NC, Nov 21, 2006 (MARKET WIRE via COMTEX) -- IBM (IBM)

IBM today announced that Thriftway Supermarket in Seattle, Washington is the first retailer to install a new point-of-sale application that provides a turnkey solution for Pay By Touch(TM), a popular biometric payment service that lets shoppers make purchases with the touch of a finger.

IBM SurePOS ACE, starting with release 4.0 and higher, will offer Pay By Touch as an option. With this option in IBM ACE, a supermarket can quickly deploy Pay By Touch to support the growing demand for reduced costs and increased security in electronic payment transactions. The new IBM SurePOS(TM) ACE application was implemented in 13 checkout lanes in a matter of hours. It enables Thriftway to handle biometric payments faster, enhancing customer service.

For simplicity and added security, Thriftway is using IBM e-business Hosting Services. As part of an IBM Software as Services solution, shoppers' Pay By Touch digital wallet information is securely stored off-site at IBM data centers. IBM Software as Services offers clients lower costs that are aligned with usage, minimal upfront expense, rapid implementation and reduced risk.

"Thanks to IBM, we have very little hardware and software to worry about," said Paul Kapioski, President and Owner of Thriftway Supermarkets, which, in 2002, installed the first retail grocery Pay By Touch biometric payment system. "We've seen many operational improvements from using the Pay By Touch system, including fraud reduction and increased transaction speed. With the new IBM ACE underpinning, we look forward to integrating additional Pay By Touch capabilities into our IBM in-store technology."

Using IBM's new SurePOS 700 Series point-of-sale systems running IBM SurePOS ACE software, shoppers at Thriftway Supermarket can now purchase groceries by providing a simple fingerprint image that is linked to their financial accounts and loyalty programs. The shopper selects which account they want to use, the transaction is processed as if a card or check has been presented, and rewards points are automatically recognized and awarded. The checkout routine is faster, helps protect customers from identity theft and eliminates the need for shoppers to carry cash, multiple credit cards, or bring their checkbook.

"As Thriftway shoppers know, Pay By Touch enables consumers to transact with no cash, no cards and no checks. There is nothing to carry, so there is nothing to be lost or stolen," said Ryan Ross, Vice President of Business Development at Pay By Touch. "Our relationship with IBM makes it easy for retailers to bring unprecedented ease, speed and convenience to shoppers everywhere."

"For more than 60 years, Thriftway has offered a wide selection of high quality products and innovative customer services," said Steve Ladwig, General Manager, IBM Retail Store Solutions. "This implementation of Pay By Touch's biometric payment service on the IBM ACE platform is the latest example of how new technologies can make shopping easier and more secure. It's also a great example of how IBM can work with a partner like Pay By Touch on a solution that can be successfully rolled out by a medium-sized retailer."

IBM's Versatile Point-of-Sale Solutions

IBM SurePOS(TM) ACE for 4690 OS is a powerful, versatile point-of-sale (POS) application designed to help retailers improve service and reliability in a flexible environment. It combines checkout support, electronic marketing, data maintenance and account management, and supports the IBM Store Integration Framework -- which enables clients to prepare to integrate an in-store pharmacy, photo kiosks or a personal shopping assistant.

The SurePOS 700 is the most powerful POS solution in the IBM portfolio, and is specifically designed to deliver the speed, availability and on-demand reliability that retailers require to transform the customer experience and increase employee productivity. SurePOS(TM) 700 models deliver fast transactions and personalized service, while providing investment production through a rugged, retail-hardened design.

About Thriftway Supermarkets

Founded in 1945, Thriftway has established a reputation for providing customers with only the highest quality products and services. With 14 supermarkets in the Seattle area, their commitment to the community sets them apart from other retailers. Each year, Thriftway stores donate thousands of dollars and thousands of volunteer hours to local causes: area food banks, little league teams, community fund-raisers, charities, civic events and other worthwhile causes.

About IBM

For more information on IBM Retail Solutions, please visit www.ibm.com/retail

With IBM SurePOS™ ACE for 4690 OS, supermarket, hypermarket and chain drug retailers can deploy a single point-of-sale (POS) application that helps enhance customer service, increase reliability and support an on demand business model.

SurePOS ACE combines checkout support, electronic marketing, data maintenance, account management and many other processes to deliver superior POS performance. It also offers outstanding operational reliability and a built-in customer loyalty program to help increase profitability. Plus, it positions retailers to take advantage of the IBM Store Integration Framework, a key component of on demand business. It also offers:

Terminal offline feature records transactions without a server connection
Supports a wide range of integrated fuel pump transactions
Now offers Pay By Touch™ integration and full check image capture
Integrated management tools and security features
Built on the proven IBM 4690 OS platform

Convenience Store News Poll

An interesting poll done by Convenience Store News revealed that almost 1 in 4 convenience store operators want to implement Pay By Touch technology in their stores. In fact, only made to order foodservice was more desirable by convenience store operators that participated in the poll. Here is the poll question and the results:

If you could choose one thing to integrate into stores, regardless of price or space, what would it be?

Gas Station TV -- 4%
Contactless credit card payments -- 8%
Gourmet coffee offerings -- 11%
Finger scan payment technology -- 23%
Fresh produce -- 4%
Made-to-order foodservice -- 25%
Ethanol/alternative fuel pumps -- 8%
Satellite radio -- 6%
Other -- 4%
None of the above -- 8%

Hedge Funds Move Into VC Turf

Tech startups take capital where they can get it. Hedge funds are getting in.

November 17, 2006 Red Herring Magazine

When news hit last month that hedge fund Artis Capital Management was an investor in web sensation YouTube, it shed a light on what is becoming an increasingly common practice.

High technology startups are turning to hedge funds for financing, particularly when they reach the later stages and need the capital to prepare for an initial public offering. Yet, as hedge funds begin moving into investment areas that were once the exclusive realm of venture capital firms, the old way of doing things is being disrupted.

“As (hedge) funds get larger, they are looking for new places to invest,” said Kathryn E. Coffey, partner at Seven Hills, a San Francisco financial advisory firm.

With the cost of doing an initial public offering skyrocketing in light of new regulations and the current investment climate, startups need significantly more capital to jump these hurdles than they did five or six years ago. Hedge funds, said Ms. Coffey, often have access to public markets that can help smooth the transition from private to public.

“A number of companies are talking to hedge fund groups,” said John Balen, general partner of Canaan Ventures, a Sand Hill Road venture firm.

Sometimes companies avoid dealing with venture capital altogether. Pay by Touch, a San Francisco biometrics company that has developed a fingerprint payment system, raised two rounds totaling $190 million in October 2005 and January 2006 from hedge funds Plainfield Asset Management and Scout Capital, plus private investors such as Quince Associates and Global Trust Partners, among others.

Industry observers say the biggest tension between the two types of firms is in their expectations about how much they will earn from their investments. Because hedge funds are highly diversified, they usually don’t have the same need for high returns from individual companies in which they invest. In contrast, venture firms have often been with a company through several stages and are counting on big returns at the end.

The difference can be between an expectation of 60 percent returns on the part of a venture firm, and a mere 23 percent for the hedge funds, said Eric W. Edmondson, partner at Seven Hills. This means that the team of investors shepherding a company toward going public or being acquired can have very different ideas about strategy.

Hedge funds usually involve themselves in later stage deals and are rarely interested in getting in on the ground floor of a new business. (Artis’s investment in YouTube is an exception to this.) Ms. Coffey said that in her experience, they’re seeking companies with a solid management team in place and a track record of performance that can be extrapolated into the future.

Not Hands-on

They also usually choose to remain in the background, she said. They don’t take seats on boards of directors as venture and private equity firms often do, and they usually aren’t all that interested in the hands-on running of the business.

Some in the technology finance world say it’s inevitable that hedge funds and venture capitalists are going to find themselves doing deals in the same space. Some even go so far as to say the traditional venture model is irreparably broken and that a new model is being constructed on the ashes of the old. Hedge funds, in this scenario, are merely taking advantage of an opening.

Clearly, certain factors that fueled the last technology boom have shifted. Nowadays, limited partners—the entities who fuel all of the private equity that invests in technology—have quite a lot of capital to invest in areas that used to be considered too risky for them, such as high technology startups. At the same time, multibillion-dollar IPOs and other profitable exits are becoming rarer.

Capitalism: Broken?

Drew Lanza, general partner at Morgenthaler Ventures, a Sand Hill Road venture firm with offices across the U.S., says the old way of doing things—expecting a big, splashy IPO at the end of the tunnel—is just not happening anymore.

“Capitalism is broken. We broke it,” he said. Luckily, he added, this has happened several times in the past and it’s always been repaired one way or another.

And while congress debates whether to regulate the hedge fund industry, for now at least these types of funds have free range to do a wide variety of deals.

As Mr. Lanza sees it, “Any time there is a movement, opportunity is created.”

The question remains, however, who will benefit from all this opportunity, and who will be left behind.
Contact the writer: SMugrabi@redherring.com

$3.25 Billion and Counting

Pay By Touch, San Francisco, Calif., was on the acquisition trail at the end of 2005 and emerged as a significant player in the acquiring business, according to Les Riedl, President of Speer & Associates, Atlanta, Ga. This week they purchased the portfolio of Paynet, including 50 NCAA sporting venues. They also announced a major strategic relationship with Citibank, which will issue "cardless" cards in Singapore.

Pay By Touch's has a valuation of approximately $3.25 Billion dollars. $3,250,000,000

Pay By Touch’s specialty is biometrics, and they have over 3.3 milion enrollees, but with the recent acquisitions and others that could be made, Riedl expects the payments portion of the business to become an ever-larger portion of the total enterprise. They currently process over $20 billion dollars worth of transactions (checks, ACH and debit/credit) annually.

Riedl sees that as good for Pay By Touch’s long-term prospects because although the growth prospects for biometrics are tremendous, revenue streams from payment processing will harbor profitability until biometrics becomes mainstream. They've established some momentum in terms of being an full service payment processor. Will they hit the acquistion trail again, at the end of this year?

A quick look at Pay By Touch’s recent acquisitions:

The assets of CardSystems Solutions, Inc., a payment processing provider, for $47 million in cash and stock. Under the terms of the deal, Pay By Touch assumed responsibility for all CardSystems Solutions, Inc. assets and for payment relationships with reportedly 120,000 small and medium-sized merchants. The deal was completed primarily for stock and some cash. CardSystems provides integrated payment solutions to associations, financial institutions and independent sales organizations and retail merchants. Through these payment solutions, CardSystems processes more than $18 billion in Visa, Mastercard, American Express, Discover, online debit and EBT transactions annually.

BioPay LLC for $82 million in stock and cash. BioPay is a biometric services provider with two million enrolled consumers, 1,600 retail implementations, and more than $7 billion in transactions processed. BioPay specialized in biometrically authenticated check cashing, with more than 2 million consumers in retailers across 42 states. The deal was closed in the first quarter of 2006. This acquistion eliminated a potentially long drawn out legal battle that was brewing before the buyout which would have resulted in potential clientele, sitting back and waiting for the outcome, before investing in one or the other. Therefore, Pay By Touch virtually eliminated the competition, and emerged as the dominant player.

ATM Direct, delivers a complete, patent-pending, software-only solution for the secure entry of a PIN number through personal computers over the Internet. Backed by a suite of security, monitoring and control processes, our service enables the secure multi-factor authentication of online users enabling, for the first time, the use of PIN-debit payments on the Internet with a low cost, easy to deploy and use, software-only solution. This could be their cash cow, as PIN debit for the internet would save Internet Retailers signifcant amounts on their card processing costs. Pay By Touch recently announced their TrueMe application, which incorporates biometric sign-on, eliminating the need for passwords and usernames. If they combine the TrueMe application with their ATM Direct application, they could give Paypal and Google Payments a run for their money.

7th Street Software, Inc. and Convena, LLC, two loyalty technology providers that Pay By Touch officials expect to significantly bolster the company’s loyalty offerings. 7th Street Software, Inc. is the developer of LoyaltySuite, a patent-pending technology that helps retailers automatically give shoppers personalized offers on the products they purchase most. The Convena, LLC assets add another layer to Pay By Touch’s loyalty offerings.

Capture Resource, a supplier of integrated reward programs and business process outsourcing solutions, further enhancing the company’s loyalty offerings. This acquisition enables Pay By Touch to offer customers interactive gift and reward programs, customized reporting, design, production, and Web access services. In addition, the company will offer retailers advanced information capture technology and database management. Pay By Touch assumes responsibility for all of Capture Resource, Inc. assets and will manage the company’s 120 million-plus consumer loyalty enrollment profiles, including more than 12,000 supermarkets and retail institutions.

The acquistion of Covena, 7th Street and Capture Resource has empowered Pay By Touch to put together and introduce, Smart Shop, a personalized marketing program that allows shoppers to receive personalized coupons either at the store, at home or via e-mail Shoppers can view offers online or by email, as well as at an in-store Pay By Touch kiosk. Their targeting engine tracks each individual shopper's purchase history and serves up "perosnalized" relevant coupons from a finger-accessed kiosk right inside the merchant's store. No need for coupons, mass mailings, loyalty card...just your finger. At checkout, discounts are automatically rewarded without the need for cards or key fobs.

These acquisitions build on a trend the company, founded in 2003, started when it acquired InterCept Payment Solutions, a merchant processing platform with approximately 18,000 customers. At the time of the acquisition, company officials said the deal reflected Pay By Touch’s ongoing evolution from a single payment solution to a provider of end-to-end biometric authentication and payment processing services.

“It’s an intriguing company, they have a lot of momentum,” Abbey adds. “Ever since they acquired InterCept, they’ve been building out their capabilities. With these acquistions they’re a lot further along than I thought they would be at this point.”

Part of the reason for the company’s success so far is the financial wherewithal of the firm’s owners Riedel says. “They have a ton of money behind it." So far, it looks like they've spent money on acquistions for growth and have built great value. Their current valuation is over $3 Billion. That's pretty a pretty darn good return on their acquistion investments.

Touch of Holiday Cheer

Pay By Touch(R), the leader in integrated biometric authentication, personalized marketing and payment solutions has joined forces with Paige Davis, formerly of TLC's "Trading Spaces," to kick-off the holiday season for Chicagoans.

The "Touch of Holiday Cheer" program is being launched on Nov. 17, 2006 by Pay By Touch and Davis, who will visit a local Jewel Osco grocery store to surprise random shoppers by paying for their groceries.

"The weekend before Thanksgiving is a fun but frenetic time for the chef of the house," said Paige Davis, actress, singer and former host TLC's "Trading Spaces." "I have teamed with Pay By Touch and Jewel Osco today to bring a touch of holiday cheer to busy shoppers and show them ways to save time getting ready for the big day."

Davis also has assigned "holiday elves" to bring goodwill from Pay By Touch to 12 more Chicagoland Jewel Osco grocery stores on Saturday, Nov. 18 and Sunday, Nov. 19 and again on Saturday Dec. 9 and Sunday Dec. 10.

Shoppers aren't the only ones benefiting this season. As a part of the "Touch of Holiday Cheer" program, Pay By Touch will make a $10,000 donation to the Greater Chicago Food Depository.

"We are so grateful for the holiday contributions being made through this partnership with Pay By Touch," said Ruth Igoe, a spokeswoman for the Greater Chicago Food Depository. "This time of year is so important. With support from companies like Pay By Touch, we can do so much more for those who need our help."

All new customers who have enrolled in and/or used the Pay By Touch(TM) biometric payment system anytime between Nov. 1 and Dec. 31, 2006 will be entered into a drawing to win a year's worth of groceries (a $10,000 value) in January 2007.

"We are extremely pleased to be working with Pay By Touch to bring this exciting program to our shoppers as they gear up for the holiday season's biggest meal," said Lauri Sanders, Director of Public Affairs, Jewel Osco. "We know our shoppers will enjoy meeting Paige and her holiday elves as they bring a touch of holiday cheer to Chicago."

About Greater Chicago Food Depository

The Greater Chicago Food Depository, Chicago's food bank, is a not-for-profit food distribution and training center providing food for hungry people while striving to end hunger in our community. The Food Depository distributes donated and purchased food through a network of 600 food pantries, soup kitchens and shelters to almost a half-million adults and children every year. Last year, the Food Depository distributed more than 40 million pounds of nonperishable food and fresh produce, dairy products and meat, the equivalent of more than 84,000 meals every day. Innovative training programs and initiatives developed by the Food Depository also work to provide men, women and children with the tools necessary to break their individual cycles of poverty. For more information, log onto http://www.chicagosfoodbank.org/ or call 773-247-FOOD.

Pay By Touch Buys Paynet Portfolio

Click Picture on Left to Enlarge

Paynet Transaction Services, Concord, California provides credit card processing for all types of merchant accounts, including 50 NCAA Sporting Venues, and special events clients which include the Rolling Stones tour, The Dave Matthews Band, the US Open Tennis Championships, the New England Patriots (VUI), the Donna Karan Warehouse Sales, the George Strait tour, Sony Signatures, and many others for whom credit card acceptance at a temporary venue means convenience to fans and customers and increased sales to the merchant.

Citibank Introduces World's First Biometric Credit Card

SINGAPORE: Singaporeans will be among the first in the world to use a biometric credit card.

Citibank - the world's largest credit card issuer - has chosen to launch its biometric credit cards in Singapore.

With the biometric payment system, card users do not even need to carry their cards with them.

The Citibank/Pay By Touch biometric system is expected to revolutionalise the way people shop and make payments.

Shoppers no longer need to present their credit card and sign for payment. Instead, it will just be a matter of having a finger scan followed by the keying in of a PIN number.

The bank is first introducing the card to some 190,000 cardholders between the age of 25 and 34. These users, according to the bank, spend an average of $800 a month on their credit cards.

Jonathan Larsen, CEO and Country Manager, Citibank Singapore, said, "We're launching this biometric payment solution as part of our launch of the Platinum Clear Card.

And for the next couple of months, we will focus on making the biometric solution available to our Clear customers. However, very shortly thereafter, we will be broadening this to all Citibank cardholders..."

The system uses technology belonging to Pay By Touch, a global biometric authentication and payment solutions provider. And Citibank will be the first credit card issuer in the world to use it.

Citibank says it plans to eventually expand the service to all of its one million Singapore customers.

Citibank plans to gradually introduce this payment system to other parts of Asia Pacific.

Translation: Every Asia-Pacific Region where Citibank's Platinum Clear Card is offered becomes, potentially, Pay By Touch territory. Currently, the Clear Card is being offered in the following Asia Pacific regions: Click any to go to the respective Citibank Platinum Clear Card Sites

Malaysia
The Phillipines
Taiwan
Thailand
Australia

Pay By Touch Honored as Top Innovation

Number 5 On List of Top Financial Innovation's By Bank Technology News

BTN Ranks Pay By Touch's ATM Direct Among Leading Companies, People and Technologies Changing the Financial Industry

SAN FRANCISCO and IRVING, Texas, Nov. 14 /PRNewswire/ -- Pay By Touch today announced that Bank Technology News has ranked it's ATM Direct online PIN debit offering No. 5 in its sixth annual listing of the 25 most significant companies and technologies bringing about vast change in banking.

The Bank Technology News "Innovators" ranking recognizes those companies that are significantly impacting key issues in the financial industry, including physical and online security. The publication also acknowledged companies defining new areas of business marketing and modeling.

"It is a tremendous honor for ATM Direct to be ranked among such technology and financial services industry giants as Oracle, IBM and Bank of America," said John Rogers, Pay By Touch Founder, Chairman and CEO. "Pay By Touch is changing the way America pays, both online and at retailers across the country."

ATM Direct,

a division of Pay By Touch, has created the industry's first online PIN debit payment service to bring the popular payment system to Internet users everywhere through a software-only solution that is easy to implement and easy to use.

Already, the ATM Direct online PIN debit service has been adopted by the ACCEL/Exchange® EFT Network, one of the fastest-growing Electronic Funds Transfer networks with more than 80 million cards, 650,000 merchant locations, 180,000 ATM locations, and 3,500 member financial institutions in the United States and Canada.

"In addition to being the most secure card payment method in the offline world, PIN debit has become the most popular," said Robert Ziegler, Senior Vice President and General Manager, ATM Direct for Pay By Touch. "We have combined the strength of PIN debit with our next generation authentication framework to bring that same security, comfort and ease of use to the Internet."

Pay By Touch is the only company that provides Internet PIN debit services with a software-only solution. The ATM Direct software is free and allows for a rapid, no cost distribution of its service to all participants.

About ATM Direct, a Division of Pay By Touch

ATM Direct, a division of Pay By Touch, provides innovative and secure payment and authentication services to the Internet economy. The ATM Direct(TM) merchant services deliver the industry's first software-only, regulatory compliant, Internet PIN-debit payment service. For additional information, visit www.atmdirect.com

BAI Press Announcement

Biometric Check Cashing Service Offers Fraud Prevention and Regulatory Compliance

The Pay By Touch Paycheck Secure Service to Help Banks and Credit Unions Build a Bridge to 45 Million Underbanked Consumers,

Pay By Touch, the leader in biometric authentication, personalized marketing and payment solutions, today announced that its Paycheck Secure(R) service is being offered to financial institutions. Paycheck Secure is a biometric check-cashing service that can help banks and credit unions generate additional non-interest fee-based income while decreasing the risk of fraud and meeting regulatory compliance requirements.

The Pay By Touch(R) Paycheck Secure service lets people cash checks using a simple finger scan to authenticate their identity. Already used by more than three million consumers in 1,700 retail locations nationwide, Paycheck Secure is a popular and widely adopted biometric check cashing service.

The Paycheck Secure service has been proven to drive an increase in check cashing volume in retail settings, while decreasing write-offs by 75 percent(1) as compared to other check management solutions. It has the power to help financial institutions streamline branch handling of 'on us' and 'non- bank' checks, reduce the risk of fraud and support regulatory compliance through OFAC screening and SAR and CTR reporting.

The Paycheck Secure service can also help banks and credit unions reach the more than 45 million 'underbanked' consumers(2) who are presently underserved by financial institutions. According to the Center for Financial Services Information (CFSI), this group represents 40 million households and spends $10.9 billion per year on 324 million alternative financial transactions. A 2006 study by BearingPoint and Visa reveals that the underbanked generate $1.1 trillion in income.

"There is no better way to protect the security and privacy of your customer than with our Paycheck Secure Service. Through biometrics, we can help banks to more securely address large and growing opportunities. For instance, the historically underbanked Hispanic community will drive 50 percent of the growth in retail banking in the decade to come(3)," said John Rogers, founder, Chairman, and CEO of Pay By Touch. "The Paycheck Secure service can help banks protect themselves while building a bridge to 45 million underbanked consumers."

The Paycheck Secure service is easy to use and easy to implement. Early adopter Zions First National Bank has rolled it out across 12 branch locations in Utah and Idaho. "The service is proving popular with customers because it makes the process of cashing checks quick and hassle-free," said Rob Brough, Senior Vice President of Marketing and Communications of Zions Bank. "Customers gain additional peace of mind knowing that no one else can fraudulently cash their paychecks."

"Banks and credit unions have proven far less successful than alternative financial services providers at using check cashing to build deeper relationships with the unbanked and underbanked," said Gwenn Bezard, Research Director with Aite Group. "Biometric check cashing represents a unique opportunity for banks and credit unions to turn around a commoditized product and differentiate on speed, quality and security of service to address those segments. It also offers them an efficient and secure way to expand the service to non-customers by mitigating traffic issues."

The one-time signup for the Paycheck Secure service is quick and easy to complete. To enroll new customers, banks digitally scan the consumer's I.D., take an electronic photograph and capture two fingerprints, creating a unique customer profile for that individual. At subsequent visits to the bank, the customer need only place his/her finger on the scanner to safely and securely cash payroll and government checks.

For additional information about the Paycheck Secure service, visit Pay By Touch in Booth #2370 at the BAI Retail Delivery Conference & Expo in Las Vegas, Nevada, November 14 - 17, 2006 or go to www.paychecksecure.com

About Pay By Touch

Pay By Touch ( www.paybytouch.com) is wowing the world one touch at a time as the leader in biometric authentication, personalized marketing and payment solutions. To date, the company's patented biometric services enable 3.3 million shoppers to quickly and securely access personal accounts using a finger scan to identify themselves, make purchases and cash checks at 2,400 locations nationwide. It also provides robust payment processing solutions for ACH (electronic checking), card-present and card-not-present debit and credit transactions for 138,000 retail clients. Founded in 2002 and headquartered in San Francisco, Pay By Touch employs 700 professionals and holds more than 50 patents worldwide on secure, convenient and cost-effective transaction solutions.

(1) Pay By Touch implementation analysis of Paycheck Secure within retail settings.
(2) A 2006 study by BearingPoint and Visa reveals that 28 million consumers are entirely unbanked, lacking a transactional savings or checking account, and another 17 million consumers are presently underserved by financial institutions, amounting to a total of 45 million underbanked consumers.
(3) Source FDIC

SOURCE Pay By Touch Krista Thomas of Pay By Touch, +1-415-728-2142, or krista.thomas@paybytouch.com; or Laura Bakken of Porter Novelli, +1-408-369-4667, or laura.bakken@porternovelli.com, for Pay By Touch http://www.paybytouch.com Copyright (C) 2006 PR Newswire. All rights reserved

BAI - Retail Delivery Conference & Expo
Michael D. Eisner, former Chief Executive Officer of the Walt Disney Co., will lead the first general session of the banking industry's annual meeting. He will illustrate how a focus on innovation is essential, because significant financial success is nearly always the consequence of creative breakthroughs.

Paul Kapioski, President of Thriftway, and Drew Hyatt, Senior Vice President of Pay By Touch, will present the conference session: "Biometrics: It’s Happening Today at a Store Near You!"

November 14 - 16, 2006
Mandalay Bay Resort, Las Vegas
Visit www.bai.org, e-mail: go2retail@bai.org or call 888-284-4076

Citibank is Singapore Connection

Ground-Breaking Initiative Provides Citibank Cardholders with Unprecedented Payment Convenience and Added Security

Pay By Touch, the global leader in integrated biometric authentication, personalized marketing and payment solutions, announced that Citibank Singapore has rolled out Pay By Touch's biometric payment services to its Citibank Clear Platinum cardholders. Effective today, cardholders are invited to enroll in the biometric credit card service, and pay for goods and services with the touch of a finger.

"Today's launch of our new biometric payment service in partnership with Pay By Touch gives our cardholders a whole new level of empowerment, marking a major milestone not just for Citibank but also for the card industry," said Jonathan Larsen, CEO and Country Business Manager, Citibank Singapore Ltd.

"With the credit card becoming very much a part of our daily lives, consumers want greater flexibility in making payments. We are proud to bring the world's first cardless biometric payment service to Singapore. This is the ultimate in convenience – the ability to make credit card transactions with just a finger scan."

"The biometric credit card service from Citibank and Pay By Touch sets a new standard for speed, convenience and security," said John Rogers, founder, Chairman and CEO, Pay By Touch.

"Together, we have eliminated the need for cardholders to present their credit cards when paying for purchases. Instead, they simply press their finger to a biometric scanner and, in seconds, their transaction is complete."

The new biometric payment service is available to Citibank Singapore's Clear Platinum cardholders as part of the launch of its new Clear Platinum card. To start, Citibank Clear Platinum cardholders will be able to make cardless credit card transactions at retail outlets such as music and IT stores, as well as clubs, restaurants and cinemas. Participating merchants include Zouk, Gramophone epiCentre, Coffee Bean & Tea Leaf and Shaw Theatre.

The biometric payment service will be introduced to more merchants and other Citibank credit cards in the near future. "We are pleased to be working with Citibank Singapore to bring an innovative and differentiating feature to the new Clear Platinum card in a crowded, highly competitive marketplace," said Drew Hyatt, Senior Vice President, Card and Authentication Services, Pay By Touch. "Already, millions of Americans love using Pay By Touch because it's a faster, easier and more secure way to pay. We are confident that Singaporeans will feel the same way."

The biometric payment service is available free-of-charge to Citibank Singapore's Clear Platinum cardholders. Enrolment takes minutes, and requires only a government-issued photo ID, a Citibank Clear Platinum credit card and a secure finger scan. Cardholders also create a seven-digit Personal Search Number, which facilitates the use of their scanned finger image to authenticate payment transactions.

The biometric enrollment kiosks will initially be made available at five branch locations: Citibank Singapore's Orchard Road, Paragon, VivoCity and Parkway Parade branches and Zouk. More kiosks will be available at other branches and merchants in future.

About Citibank

Citibank is a member of Citigroup (NYSE: C), the leading global financial services company which has some 200 million customer accounts and does business in more than 100 countries, providing consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, and wealth management. Major brand names under Citigroup's trademark red umbrella include Citibank, CitiFinancial, Primerica, Smith Barney, and Banamex.

Additional information may be found at: www.citigroup.com

Citibank Partners with Pay By Touch

Citibank rolls out world's first biometric credit card service, targets yuppies here in Singapore - Chow Penn Neepennnee@mediacorp.com.sg

Citibank has just raised the bar for the credit card market. .You won't even need a physical card any longer to party, dine or shop. All you will need is your finger, for a scan.

Rolling out the world's first biometric credit card service yesterday, the American bank is targeting Singapore yuppies for the launch, before extending it to the rest of its over 700,000 card members here.

With the free service, cardholders need only press their finger to a biometric scanner located at participating stores. Currently, only nine outlets offer this service but others will be roped in.

Not only can customers cut down on payment queue times, they have the added protection against card fraud, said Mr Jonathan Larsen, chief executive officer and country business manager, Citibank Singapore.

"With the credit card becoming very much a part of our daily lives, consumers want greater flexibility in making payments," he said, adding that this move will transform the local payments industry.

The global bank is also looking at using biometrics for Internet banking. Other forms of biometrics involve authentication via facial and voice recognition.

Commenting on the security of the system, Mr John Morris, president and chief operating officer of US-based technology partner Pay By Touch, said the service has "military-level encryption" to ensure data security.

To assuage fears that the data collected would be misused along the way, Mr Larsen said that the digitised fingerprints are encrypted and stored in different databases from other information like the name and card numbers of cardholders.

This keeps the information separate and prevents abuse, said the bank.

Mr Larsen declined to reveal the investment amount of its biometric service, except to say it is in the "multi-million" range. Citibank plans to roll out the platform to all it's cardholders in Singapore and then move on to Malaysia and the Mainland. They also plan to use the Pay By Touch biometric platfrom for online banking and purchasing over the Internet, which is, at the end of the day, why they are partnering with Pay By Touch in the first place.

It certainly raises the competition for a market that has seen a slew of creative concepts over the years — such as shrinking the cards by half — to woo the crowds. On whether the latest biometric system will take off, intellectual property lawyer Bryan Tan said: "It's innovative. The current card technology has flaws, as we have seen from security breaches in cloning of credit cards." But he added that its popularity would depend on acceptance by both merchants and users. Merchant's certainly have a vested interest since biometric ACH transactions cost about a third less than debit transactions, which in turn, cost about 25% less than credit card transactions.

The Innovators

The Innovators

The only source of profit, the only reason to invest in companies in the future is their ability to innovate and their ability to differentiate," Jeffrey Immelt, CEO of General Electric, once observed. That thinking is a welcome reminder for the banking industry, which finds itself grappling with an inverted yield curve, commoditized products and customers who expect more from their financial relationships. By John Adams, Glen Fest, and Holly Sraeel

The good news? Innovation is occurring.

In its annual ranking, BTN profiles 25 innovators whose contributions to banking are changing the rules of the game. Here's the Top 5:

1. Bank of America - Security Team:

William Fox, senior compliance executive for financial crimes; Chris Swecker, head of corporate security; Donna Bucella, business continuity executive

Time and time again, banks have been warned that when it comes to securing the enterprise, regulators and other government agents are watching to make sure the job gets done correctly. Bank of America, though, has gone straight to the source, recruiting a group of former government insiders to give it the best security guidance possible for its complex business.

In the past year, the bank has appointed three high-level executives who are charged with oversight of the bank's operations. William Fox, BofA's senior compliance executive for financial crimes, previously worked in the Financial Crimes Enforcement Network (FinCEN), where he had been director since 2003; Donna Bucella, BofA's business continuity executive, did a stint as head of the U.S Terrorist Screening Center for the FBI's Department of Homeland Security; and Chris Swecker, head of corporate security for the bank, is a former director at the FBI.

It's no surprise that security is front and center for the Charlotte-based bank. Public perception of how safe an institution is can be just as important as the security systems, policies and procedures put in place. For Bank of America, what better way to protect itself than by employing the very government officials once responsible for safeguarding against terrorism and financial crimes? (JA)

2. Goldman Sachs - Liquid Machines

Goldman Sachs is a bold proponent of what's called enterprise rights management (ERM), an approach to information security that could open up a new frontier in shielding sensitive data. Just how bold? It's put a little skin in the game.

The global investment banking giant is not only the marquee customer for Liquid Machines, but it's also a financial backer, joining the likes of Atlas Venture, Masthead Ventures and Draper Fisher Jurveston as the lead investor in a recent $7.5 million round of financing.

That puts Goldman on the ground floor of ERM, which marries security with the data itself, particularly key intellectual property and customer information. Access protection and usage control enforcement travel with electronic documents from machine to machine, in and outside the bank. Far beyond firewalls and gateway filters, which don't provide granular enforcement of acceptable use policy that define what users can and cannot do with data, ERM is the wave of the future. Phil Venables, managing director and chief information risk officer for Goldman, calls ERM a "significant enabler" of a protection strategy that allows for protection to reside with the information itself, not just the containers of the information. (JA)

3. IBM - Industry Models

Extending its end-to-end risk and business analytics model into the institutional investment arena, IBM launched its Financial Markets Industry Models that present data analytics, service and process templates to cover a global firm's risk assessments, all the way from the trade confirmation to eventual settlement.

The FMI models provide a real-time assessment of market, operational and credit risks; the models also audit high-risk transactions to cover exposure to Basel II capital requirements, Sarbanes-Oxley governance, and even the European Union's "MiFID" legislation, which, among other things, covers capital requirements and monitors commodity and credit derivatives. These models are similar to ones used by seven of the world's top 10 banks and insurance companies for straight-through processing, optimized workflow and business rules management. The difference? More institutions can take advantage of them. The models also help businesses delving into service-oriented architecture environments, say IBM officials, because they have pre-built business processes and service definitions. (GF)

4. ING Direct - Behavioral Marketing

The closest direct banks normally come to knowing a customer is an IP address. But with more clients coming on board with more available funds in high-yield savings accounts, ING Direct has adopted what it calls "Smart Sell" techniques to target users with ads specific to their interests and derived from multiple-channel interaction. So how does ING get to know customers they only observe through the Web or phone? Smart Sell uses a cross-channel, behavioral marketing solution based on a module from Epiphany that personalizes content on the Web site-links, banner ads, etc. In one example, a prospect calling ING's call center about a mortgage will begin to see mortgage ads the next time he or she logs in. It not only increases revenue-ING Direct head of marketing, John Owens, says there has been a "300-plus" percent increase in offer acceptance-but also keeps the bank from nagging customers with non-relevant offers. Although some banks have adopted call center CRM tools that help give a live operator some insight into a customer's behavior, Jupiter Research analyst Asaf Buchner thinks ING's solution is its unique flavor. "For traditional banking institutions, internal silos and the presence of different databases and legacy systems often inhibit these types of initiatives," he says. (GF)

5. Pay By Touch - Online PIN Debit

Brick-and-mortar stores have about a 30 percent reason to encourage customer use of PIN debit instead of signature debit at the cash register.

Online Merchants don't even have that option as signature debit is a physical impossibility, and online PIN debit has not been available. However, with the launch earlier this year of ATM Direct, a newly acquired subsidiary of biometrics firm Pay By Touch, online merchants may finally get their chance to get away from interchange fees.

ATM Direct went live with the first ever online, PIN-secured payments system last June when it announced agreements both with a small retailer (J. Paul Co.) and the ACCEL/Exchange EFT network. It would be hard for online merchants to ignore the savings PIN Debit could afford them, as they usually pay more than bricks and mortar stores in the first place, thus making online PIN Debit even more attractive. Online merchants can save about 40% on Interchange Rates, which equivocates to millions of dollars in savings for large online retailers like Amazon or Overstock.com

On the other side of the equation, online shoppers averse to handing out credit-card numbers online can install the ATM Direct software on their PCs, and are prompted to enter PINs into an on-screen keypad. The software overcomes the longstanding problem with online PIN debit, which normally requires third-party hardware systems for security reasons.

ATM Direct SVP and general manager Robert Ziegler estimates that ACH-enabled technologies could grab 50 percent of online payments market share.

The firm plans to pursue new opportunities in mobile-based PIN debit offerings in 2007.

Pay By Touch Expanding Into Singapore

Look for an upcoming announcement that Pay By Touch will expanding into Singapore coupled with whom it is they're going to be partnering and launching with. In the meantime, they are getting their website customized for the SG market. You can take a look at www.paybytouch.sg

Singapore Key Statistics:

Population & Area
Demographic Indicators
Literacy & Education
Social Indicators
Employment
Economic Indicators

With operations in the United States, the United Kingdom, Shangahi-China, and Singapore. Pay By Touch is well on their way to accomplishing their mission of becoming an international "global" payments company.

On a side note, PBT's new "hall of fame" marketer, John Costello, will be a guest on Webmaster Radio's on November 23rd to talk about Pay By Touch and his new role with the company. Stay tuned for how to listen to the podcast or click the link below...

WebmasterRadio.FM Hit Show 'DishyMix'
Announces November Guest List:

Some of the global Web 2.0 and digital marketing industry's most famous names and fascinating individuals including John Costello of Pay By Touch, formerly CMO of Home Depot, will be our guest on November 23rd.