Biometrics to Change Relationships

Biometrics to Change Relationships
By George Anderson

John Costello has an impressive resume as a marketing executive with Home Depot, Sears and Yahoo. His new job, president of the biometric payment company Pay By Touch, doesn't seem as prestigious at first glance, but don't tell that to Mr. Costello.

As far as he is concerned, he is in exactly the right place, he told Ad Age, because he believes biometric systems have the potential to transform the relationship among consumers, retailers and manufacturers."

As he sees it, marketing is in the process of evolving from mass communications to one-to-one relationships. In the future, as he sees it, consumers could pay for groceries with a touch of a finger at an in-store kiosk and, at the same time, receive offers based on their personal preferences and previous shopping behavior.

There still appears to be a long way to go before Mr. Costello's future vision has the opportunity to be realized. Pay By Touch is still in the early stages of development, testing its system in 2,400 stores.

Discussion Question: What do you see as the potential of biometric technology in retail operations?

The Return of John Costello - AdAge.com (free reg. required)

Comments... Send in Yours!

Oh, yes. Nothing says "close relationships" like fingerprinting someone or doing a retina scan. Len Lewis, President, Lewis Communications, Inc.

When Pay by Touch and their (former) top competitor, BioPay (which was bought by PBT) first came onto the scene, their proposition to the customer was speed and convenience, while helping the retailer to transfer a significant amount of transactions from the more expensive "credit card" transactions to some lesser expensive form of cash transaction.

To the extent that Pay by Touch wins over shoppers with their biometric option, their marketing programs to achieve "critical mass" participation from shoppers will dictate the financial success of the core product, on the premise of less expensive transactions fueling the ROI.

But in my view, what John Costello understood when he came on board as CEO of PBT was that the core business proposition had to change from a "payment system" alternative, to a "customer recognition system." The latter, broader vision of the role of biometrics enables PBT to begin to partner with other one-to-one, CRM solutions. This synergy, plus the acquisition of Bio Pay, has propelled PBT into a position of market leadership. Now the outstanding question is whether or not the propositions to both retailer, brand, and end customer are compelling enough to drive acceptance and usage.

My bet is yes; with time and the right engagement programs, biometrics and PBT has a real chance of becoming a real alternative to credit card transactions and frequent shopper card swiping.

Mark Heckman, VP, Retail Insights, Sorensen Associates, Inc.

Chicagoan is 3 Millionth PBT Enrollee

Pay By Touch Provides Three Million Americans With Today's Most Convenient and Secure Payment Option
Last Update: 10:01 AM ET Sep 27, 2006 SAN FRANCISCO, Sept 27, 2006 /PRNewswire via COMTEX/ --

Mary Rodriguez was celebrated as Pay By Touch's three millionth member, after signing up at a Jewel-Osco grocery store located in Chicago, Ill., at Wrigley Field on Sept. 26, 2006. (PRNewsFoto/Pay By Touch)

Pay By Touch(TM), the leader in integrated biometric authentication, personalized marketing and payment solutions has achieved a major milestone with the enrollment of three million members.

The Pay By Touch biometric payment system is quickly gaining traction with consumers who find it more secure, faster and easier to use than traditional payment systems.

Major retailers nationwide, including Jewel-Osco in Chicago, have implemented Pay By Touch in their stores to improve customer service, speed up the checkout line and reduce risks associated with fraud.

Chicagoan Mary Rodriguez is being celebrated as Pay By Touch's three millionth member, after signing up at a Jewel-Osco grocery store located on Narragansett Ave. in Chicago.

To commemorate the milestone, Pay By Touch will deposit $1,000 in Rodriguez' new Pay By Touch digital wallet, which can be accessed with the touch of a finger at more than 200 stores in the Chicagoland area, including all Jewel-Osco and Cub Foods locations, as well as a new Sunflower Market in Lincoln Park.

To broaden the celebration, Pay By Touch has declared Wednesday, Sept. 27, 2006, 'Mary R. Day' at the Narragansett Avenue Jewel-Osco store. Pay By Touch will deposit $5.00 into the digital wallets of all new enrollees who sign up for its biometric payment service in the Narragansett Avenue store that day.

"I was excited to try the Pay By Touch system because I was really curious about how it works, and my kids think the whole idea is 'cool,' said Rodriguez, a mother of three and teacher in the Chicago Public Schools. "When I learned that it was actually safer than using my debit card, and saw how much easier it was than digging through my purse, I knew it was for me."

"We are extremely pleased to welcome Mary as a Pay By Touch member. With the touch of a finger, she joined the three million consumers that are already enjoying the convenience and security of biometric payment," said John Rogers, Pay By Touch's founder, chairman and CEO. "Chicagoans are busy, hardworking people who understand that Pay By Touch makes life easier."

The Pay By Touch system uses a simple finger scan to authorize an electronic withdrawal from a customer's existing checking account. Each fingerprint is unique, which helps prevent fraud or identity theft, and since there is nothing to carry, there is nothing to be lost or stolen.

A one time enrollment in the secure program takes only a few minutes to complete online or in person at participating stores. Members can link both their checking accounts and their merchant loyalty membership cards to the Pay By Touch system. Once enrolled, Pay By Touch members are able to use the Pay By Touch system at any participating store.

PBT is 2006 Innovation Award Nominee

PBT Nominated for 2006 Chicago Innovation Award

The 126 nominees for a 2006 Chicago Innovation Award will be honored Wednesday at a reception on the trading floor of the Chicago Board of Trade, one of the sponsors of the five-year-old awards program

Hall of Fame Marketer Chooses PBT

Prominent Consumer and Retail Executive Joins Biometric Industry Leader

Pay By Touch, the leader in integrated biometric authentication, personalized marketing and payment solutions, today announced that John Costello, former Executive Vice President of Merchandising and Marketing for The Home Depot, has joined the company as President, Consumer and Retail. Costello will report directly to John Rogers, Founder, Chairman and CEO, and will take a seat on Pay By Touch's Board of Directors.

Costello brings more than 25 years of general management, retail and technology leadership to Pay By Touch. In his new role, he will work closely with John Rogers and John Morris, Pay By Touch's President and COO, to lead the company's biometric authentication and payment services, while also spearheading its new personalized marketing and online services lines of business.

"Pay By Touch is bringing the power, the privacy and the security of biometrics to everyday life," said John Costello, President, Consumer and Retail, Pay By Touch. "I look forward to working with John Rogers, John Morris and our world class senior management team to address the full extent of that opportunity. Together, we will bring truly personalized marketing and unprecedented ease, speed and convenience to consumers everywhere."

Costello joins a dynamic leadership team that features a unique combination of entrepreneurs and proven veterans from the retail, franchise, financial services, heath care and loyalty marketing industries. John Rogers has more than 15 years of experience as a visionary, entrepreneur and manager. Prior to founding Pay By Touch in 2002, he was founder and CEO of eBizWorld.com. John Morris brings more than 23 years of experience in general management and retail technologies from IBM.

Pay By Touch's management team has in-depth experience working with such industry leaders as VISA, MasterCard, Bank of America, First Data Corporation, Concord EFS, IBM, Accenture, Siebel Systems and more to bring innovative ideas, products and services to life.

"As a world-class executive with deep retail expertise, John Costello brings proven leadership skills and unparalleled industry knowledge to Pay By Touch," said John Rogers, Pay By Touch's Founder, Chairman and CEO. "We are thrilled to have him on board, underscoring our ability to attract seasoned management as well as our commitment to serving merchants and consumers alike."

John Costello is a well-known and highly respected senior executive. The first half of his career was spent in classic management jobs, with the second half devoted to helping companies manage through high change environments, from start-ups like MVP.com to $80 billion companies like the Home Depot.

As part of this, Costello has been involved in some of the most visible business turnarounds and been associated with some of the most successful marketing campaigns including "Come See The Softer Side of Sears" and "You Can Do It. We Can Help." at The Home Depot.

He was most recently Executive Vice President of Merchandising and Marketing for The Home Depot, where he held responsibilities for the company's merchandising, marketing, advertising, and visual and store merchandising, public affairs, eCommerce and global sourcing, including the Company's sourcing offices in China and Mexico.

Costello joined The Home Depot in November 2002 as Executive Vice President & Chief Marketing Officer, and was promoted to assume responsibility for merchandising and global sourcing in August 2003. He led a major transformation of the merchandising, marketing, eCommerce and sourcing operations, and worked with the senior leadership team on long-term growth strategies.

Costello joined The Home Depot from Yahoo! where he served as Chief Global Marketing Officer. At Yahoo!, he worked with the CEO and senior leadership team on many of the strategies that are driving Yahoo's growth today. Prior to Yahoo!, Mr. Costello was President and CEO of MVP.com, the Internet sporting goods and outdoor retailer, which he founded with John Elway, Michael Jordan and Wayne Gretzky. He also served as President and Chief Operating Officer of Nielsen Marketing Research, USA, where he led a major restructuring of Nielsen's product line, customer service model and technology platform.

Costello served as Senior Executive Vice President of Sears from 1993 to 1998, and was a key member of the team that revitalized Sears with the "Softer Side of Sears" marketing campaign and increased focus on Sears' proprietary brands. He was an early leader of multi-channel retailing, and launched Sears.com and Sears' specialty catalog business to replace the "Big Book". He served as a member of Sears' Executive Committee and on the Board of Directors of Sears Canada. Costello began his career at Procter & Gamble, where he held a number of senior marketing and brand management positions. He also served as Senior Vice President of Sales and Marketing at Pepsi-Cola, USA.

A frequent speaker on industry trends, Costello was named one of the 30 Most Influential People in Marketing by Advertising Age, one of the Top 10 Merchants by DSN Retailing Today and was elected to the Retail Marketing Hall of Fame in 1997. He is a past director of The Quaker Oats Company (NYSE) and The Bombay Company (NYSE), and the Direct Marketing Association, and a current director of the American Film Institute (AFI), the Steppenwolf Theatre, and the Georgia Aquarium. Costello is also a director and past chairman of both The Ad Council and the Association of National Advertisers, and chaired the selection committee for the 2006 inductees into the Advertising Hall of Fame.

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 three million shoppers to quickly and securely access personal accounts using a finger scan to identify themselves, make purchases, earn rewards 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 and manages personalized rewards programs for 130 million opt-in consumer profiles. Founded in 2002 and headquartered in San Francisco, Pay By Touch employs 700 professionals and holds 50 patents worldwide on secure, convenient and cost- effective transaction solutions.

SOURCE Pay By Touch Krista Thomas of Pay By Touch, +1-415-371-5766, or krista.thomas@paybytouch.com http://www.prnewswire.com Copyright (C) 2006 PR Newswire. All rights reserved.

John Costello Lands at Pay By Touch

The Return of John Costello

Former Home Depot, Sears Exec Lands at Biometric Company Pay By Touch

Longtime marketer John Costello is now co-president of biometric payment company Pay By Touch.

COLUMBUS, Ohio (AdAge.com) -- One of marketing's most-watched players, John Costello, has finally resurfaced: as president of consumer and retail at Pay By Touch, a privately held biometric payment company in San Francisco.

Mr. Costello, a former Advertising Age Power Player and marketing Hall of Famer, who has held high-level marketing positions at Yahoo, Sears Roebuck & Co. and, most recently, Home Depot, will report directly to Pay By Touch founder-CEO John Rogers. The 59-year-old Mr. Costello shares the president title with John Morris, who joined the company in May 2005 after 23 years at IBM.

Passed up CEO offers

"I had a number of CEO opportunities, but at the end of the day I became the most excited about a partnership with John Rogers," Mr. Costello said. "I was excited about the potential of Pay By Touch to transform the relationship among consumers, retailers and manufacturers."

Though he declined to name specifics, Mr. Costello said offers came from "retail, consumer products and technology companies," adding: "They are still coming in." Chicago-based recruiting firm Spencer Stuart handled the Pay By Touch search.

Mr. Costello said that he sees mass marketing evolving into one-to-one relationship marketing, where brands seek ways to isolate their most valuable customers -- something he said Pay By Touch is positioned to capitalize on. He said the company's 3 million members eventually could, with a touch of a finger at a kiosk in a grocery store, receive offers tailored specifically to their needs and shopping history.

As Pay By Touch brings fingerprint payment-scanners to checkout lanes at leading grocery chains, convenience stores and check-cashing facilities nationwide, Mr. Costello's contacts in the retail and marketing world, including his role as a key player in the Association of National Advertisers, will prove useful.

Mr. Costello's unconventional career track led him to the top marketing ranks of Sears and Yahoo before his nearly three-year stint at Home Depot. He was also president at Nielsen Marketing Research and AutoNation and was CEO of MVP.com, before it folded in the late '90s dot-com bust.

Varied career

That varied career, Mr. Costello said, will serve him well at Pay By Touch. "This job goes back to my days at Yahoo and my days at Nielsen," he said. "I know how to help early-stage companies in an emerging technology space." Mr. Costello said that in the 14 months since he left Home Depot, he served as an adviser to a number of private equity firms and merchant banks, and recently joined the board of Aspen Marketing Services, a privately held marketing services company known for its direct-marketing work.

Paycheck Secure - Product of the Day

Pay By Touch Paycheck Secure 8.0

Pay By Touch upgraded its Paycheck Secure technology to allow retailers to deposit all checks with the push of a button.

Pay By Touch Paycheck Secure 8.0

Pay By Touch upgraded its Paycheck Secure technology to allow retailers to deposit all checks with the push of a button. It also offers fingerprint authorization for customers to cash government of payroll checks, more secure transactions, time savings and faster access to funds.

Check 21 is also integrated to allow checks to be deposited using electronic images rather than paper checks. Customers sign up for the check cashing feature by providing a photo ID, two finger scans and a digital photo which is taken in the store.

Customers can then quickly and securely cash payroll checks with a quick and simple finger scan. After a store has completed check cashing for the day, managers can deposit checks to a bank account electronically with the touch of a button. For more information, please visit:

Pay By Touch, Herndon, Va.
(866) 280-1679
www.paychecksecure.com

PBT Lets Customers Pay at the Pump

A few Stop 'n Saves in Colorado are using new biometric readers that scan fingerprints, then charge customers' cards. Its maker says a 7-digit PIN keeps data secure.

By Kristi Arellano, Denver Post Staff Writer

When customers are asked to pay for their purchases at Stop 'n Save stores on the Western Slope, an increasing number of them simply give the finger. Index finger, that is.

Six of the 16 Stop 'n Save gas and convenience stores operated in Colorado by Feather Petroleum began using a biometric payment system this spring that links customers' fingerprints to their checking accounts. The system allows them to pay for their purchases without opening their wallets.

Feather Petroleum joins some 2,500 retailers in 44 states that use payment technology offered by San Francisco-based Pay By Touch.

Grocers including Piggly Wiggly in the southeast and several chains operated by Minneapolis-based SuperValu have adopted the payment technology, and 3 million people are registered for the service.
.

"Identity theft has become such a huge problem," said Bonnie Lightfoot, the company's director of human resources. "This is one way to help control that for our customers."

Customers at the six stations register by scanning their fingerprints and providing a voided check to the store. They can then pay for purchases by scanning their fingers and entering a 7-digit PIN number to verify their identities. Usually that number is their phone number without area code.

Feather Petroleum launched the technology in and near Grand Junction in March. It eventually expects to expand the system throughout Colorado to stores in locations that include Vail, Salida and Winter Park.

John Morris, president and chief operating officer of Pay By Touch, said the company expects to expand to additional Colorado retailers in the future. It has emerged as the top player in the biometric payment sector, snapping up its biggest competitor, BioPay, for $82 million in stock and cash in a deal that closed in January.

The company pitches its system as a way for customers to save time at the checkout line and for retailers to save money by avoiding fees charged by credit and debit-card companies.

Pay By Touch charges a per-transaction fee that is often as much as 60 to 70 percent lower than fees charged by credit-card companies, Morris said. Pay By Touch terminals cost about $300 each to install, and business operators can frequently recoup their investments within eight or nine months, he said.

Critics of the technology worry that it's not advanced enough for widespread retail use.

"A lot of people will buy into it based on convenience," said Lee Tien, a senior staff attorney with the Electronic Frontier Foundation in San Francisco. "But I think the jury is very much out on biometrics as something that is going to have benefit in a lot of areas."

Morris said the combination of the fingerprint image along with the 7-digit identification number eliminates concerns about false positive readings, while false negatives are rare and quickly corrected. To protect its data, the company uses military-grade encryption.

"We take security as our top priority," he said.

While customers may express concerns about privacy, they may ultimately be won over by convenience, said Linda Elliott, a partner with Glenbrook Partners, a consulting firm that specializes in payment systems.

"People will tell you they don't want to give up biometric information. But talk to somebody with a couple of kids in tow, and they'd be thrilled to just slam their thumb down and be done," she said.

Lightfoot said some Stop 'n Save customers raised privacy concerns but came around after they received pamphlets detailing Pay By Touch's privacy and security procedures. More than 1000 people have signed up for the service since it was launched in March, she said.

Staff writer Kristi Arellano can be reached at 303-954-1902 or karellano@denverpost.com.