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July 21, 2009

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Pay by finger?

ANCIENT Chinese used their thumbprints to sign documents and authorize payments. Now a technology company is targeting hip young people who want to pay by finger. Yao Minji leaves her print.

We've heard about letting your fingers do the walking, through the Yellow Pages, but now you can let your fingerprints do the paying, at least in some spots.

Pay-by-finger debit technology - a kind of biometric recognition linked to your bank account - is considered very hip by some young people.

The manufacturer of Live by Touch says it has 100,000 registered users in Shanghai and 5,000 retail venues, and more to come. Its target audience is young people who want to be cool and are open to new ideas and innovative technology.

After all, the ancient Chinese used their thumbprints to sign documents and contracts and authorize payments, so there may be more cultural receptiveness to biometric finger scanners than in the West.

It's just getting started, many retailers are unfamiliar with it and it's unlikely that prints will take the place of plastic. Still, it has its appeal: If you don't have enough cash and aren't carrying a debit or credit card, just use your finger. It could make purchases very easy, and retailers like that.

So far they are in some inexpensive restaurants, ice cream stories, convenience stores, cinemas, clothing stores and department stores.

One pay-by-finger wannabe is Jessica Zhao. She finishes dinner with friends at a popular Japanese buffet chain restaurant on Nanjing Road Pedestrian Mall. She asks to pay by fingerprint.

"Wow, you can do that in Shanghai?" Zhao is flattered that her friends think she is so cool. But the waitress says she has to pay at the counter because she can't take the print pay device to the table.

A little embarrassed, Zhao goes to the counter to find a machine like that for swiping cards - except there's a small square at the bottom for a print. The staff member says it could be taken to the table, as with a debit card, but the waiters are unfamiliar with it.

"That's because you're our first customer," one tells her.

"I really like the service because it's convenient and hip. In Japan, you can pay by cell phone, but now we can only use our fingerprints, the way our ancestors did," says Zhao.

But it's still so new that the service hasn't caught up with the technology.

Pay by finger, as it's commonly called, is a new technology for retail payment developed and promoted by Shanghai-based technology company Live by Touch. It came out in Shanghai at the end of 2007 when some convenience stories were equipped with the system.

It was only last month, however, that the company started promoting it in a big way - trying to get young people to register their prints.

A big customer concern is security. Is it safe to trust your fingerprint, a very private and unique identification, to a commercial company? Can the print be copied so that others have access to one's bank account? What will happen to the print? What if the database is stolen?

No worries, everything is fine, the company says.

In the past few years, many companies in Shanghai decided they wanted to keep track of employee attendance and working hours, so they installed fingerprint-recognition devices. The device may take a while to recognize the print. If the finger is wet/sweaty, hurt or pressed differently, it may not register.

Employees are required by their employers to register their prints in a database. The attendance device compares prints.

Pay by finger uses the same technology to compare numbers calculated for 40 points on each print - it actually compares the relationship between points.

The technology was used for national security and military purposes before it was used commercially in 2005, says Gary Chen, senior marketing manager of Live by Touch.

"Each time you press, there's a different set of numbers, depending on how hard you press and at which angle, but the internal logic is the same. So it is very secure because nobody can recreate how your print looks like from the numbers," says Chen.

In early June Miss Zhao, the finger-paying wannabe, registered her fingerprint to establish a link with her debit card from China Merchants Bank.

The purpose was to take advantage of a cinema promotion: watch "Transformers 2" for only 1 yuan (15 US cents). The average ticket costs about 80-100 yuan. "So the promotion is an irresistible deal," she says.

The promoter subsidized the tickets.

Another attractive deal is a huge discount of a popular chain Japanese all-you-can-eat restaurant, which usually costs 160 yuan per person. After registering your print, you can take advantage of the special, one time only.

The discount depends on the date. For example, it's 10 percent of the original price on the 1st, 11th, 21st and 31st - dates containing the number 1. It's 20 percent on the 2nd, 12th, 22nd, and so on. Again, the promoter subsidized the meals.

The cinema and buffet finger discounts were popular. Long lines waited outside cinemas for on-site registration. The discounted seats in the buffet were booked two weeks in advance.

"We have more than 100,000 users in our database for pay-by-finger service, mostly from our campaign since June," says Chen.

The company plans to launch discount promotions and sign up new retail partners, he says. Next year it aims to expand to Nanjing in Jiangsu Province and Guangzhou and Shenzhen in Guangdong Province.

People can link their prints with a debit card from China Merchants Bank, Industrial and Commercial Bank of China, Bank of Communications and China Construction Bank - among the largest national banks with branches around the city.

China Merchants Bank plans to link prints with credit cards in a few weeks and other banks are expected to follow in September. Five more banks are expected to sign up.

Some Western companies also tried to promote the technology and service in the United States and Germany but response was cool. Chen attributes that to different history and culture.

"Shanghai's a great starting point because young adults, our main target group, can accept innovative ideas quite easily and are willing to try with technologies," says Chen.

"Moreover, the fingerprint has always been a significant part of Chinese culture since ancient times - that's how they signed documents, paid or made contracts in ancient times. So it might be easier for us to accept it as a payment method," he says.

For many users like Zhao, however, it still has a long way to go.

Shanghai Daily found it very difficult to get through on the company's service line since it's always busy. The Web page for application has crashed a few times.

Many shop assistants and waiters are still unfamiliar with it and many registered users are not using it - they're waiting for the next huge discount.

"The response is higher than our expectation and we are trying to expand and improve service," says Chen. "New technology always encounters problems, we just need time to solve them."

Some call it cool, some call it risky

Gary Chen, senior marketing manager for Live by Touch, developer of pay-by-finger technology

"It's not asking you to get another card, but rather an additional function to your existing card. We are confident of the future of this service because it's secure, convenient, fashionable and a good bargain."

The company plans to launch a service which links the print with all kinds of VIP and discount cards so "you can still enjoy the benefit without carrying a dozen of different cards."

A clerk at a convenience store in Changning District

"We were told by the store's manager about the new machine, but only two customers have used it so far. I practically forgot about it."

"It doesn't make much difference for me, because it's the same as swiping bank cards. Instead of swiping the card, they scan their finger and type in a number just like password. It's actually quite fast."

An employee of China Merchants Bank working with Live by Touch

"It took a very long time for us to review the project, especially security. We consider it useful for our customers, mostly young and high-end white collars who will enjoy fashionable and innovative technologies." She declined to give her name.

"Most of our concerns involved security, not only the fingerprint database but also the company's own status. We have to consider what happens if the management or shareholders of the company change in a few years. We signed an agreement with Live by Touch about all security matters."

The bank has been receiving positive feedback from customers. During the two big promotions in June, the bank received more than 100 applications each day on-site in the cinema and restaurant.

Julia Pan, 24-year-old magazine editor

Pan registered in June to get the discount at a Japanese all-you-can-eat restaurant.

"It's cool and convenient, but I haven't used it since then," says Pan. "I registered with a card that I don't use frequently so that it won't be insecure."

Pan's boyfriend warned her to be careful when she registered. "It's new worldwide, so you don't know what will happen. We just want to be the first cool group, but not the first group of victims. It's always good to be more careful."

Pan has decided to wait and see how the service develops.

Will Chang, 31-year-old game designer from Hong Kong

"I'm not sure about trusting my fingerprint to a company. After all, it's different from getting it scanned at the Customs. Fingerprints are private and unique. Personal information gets leaked so frequently nowadays and a fingerprint is different from cards or other information. What if someone chops off my finger rather than stealing my bank cards?"


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