CHICAGO -- Technology allowing customers to make purchases with just their palms certainly sounds cool and cutting edge, but the system's low processing fee might be the more exciting allure for convenience-store retailers.
Even so, it seems like there’s a long road ahead before Keyo, a Chicago-based palm-payment company, is ready to implement its technology throughout the country.
Here are four details about Keyo, how its system works and its potential in c-stores …
The fledgling palm-payments company charges a 1% fee per purchase with no monthly fees attached. That’s compared to the 3% fee, with separate monthly fees added in many cases, that most credit-card companies currently charge. C-stores in the United States paid $10 billion in swipe fees in 2015 alone. Cutting those fees by two-thirds would clearly benefit the industry.
Keyo uses its low fees as a selling point. It explains on its website that its goal is to move “payments away from middlemen profiting and back to what it should be, a friendly exchange between a merchant and a shopper.” With some lawmakers making noises about repealing the Durbin Amendment, technology such as Keyo’s could inject much-needed competition into a payments industry dominated by credit-card companies.
The company is very young, as Keyo’s palm-pay system is only available in one restaurant and one coffee shop, both in Chicago, at this time.
Its website includes a link for retailers to schedule a meeting to discuss adopting the new technology, but it says that available spots are limited. The page introducing its staff only shows four people, three of whom are listed as co-founders, and the home button on the website still reads, “Keyo Beta.” Judging by these details, it is unlikely that Keyo has the infrastructure to make its service available to any and all retailers at this time.
To use Keyo's service, customers must first go online, create a Keyo account and attach their credit card(s) to the account. Once this step is complete, Keyo sends the customer a registration code. The customer then brings that code to a business that uses Keyo, scans his or her hand a couple of times and enters the registration code. The biometric data scanned from the customer’s hand is then matched in Keyo’s system with the credit-card numbers.
Keyo uses the same technology found in fingerprint readers, face recognition or retina recognition technology to identify a customer’s biometric data. Its ultimate goal is to “improve the human experience by eliminating physical cards, keys and tickets.”
When a customer places his or her palm on a Keyo scanner, the device encrypts and sends the customer’s biometric data to Keyo, where the company matches the data with its customer information and approves the purchase if the data matches. Keyo has partnered with Tokyo-based tech company Fujitsu for the palm-scanning devices.
Keyo’s website says it does not share or sell biometric data, and that personal information is protected by Secure Socket Layer and AES 256-bit encryption technology. As the recent security breach at San Jose, Calif.-based Verifone shows, no company is completely covered when it comes to data security, but Keyo wants to assure customers and potential clients that it is taking steps to protect customer information.
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