A handier way to pay R apid City ser ves as testing ground for revolutionar y pay-by-touch system

BY KRIS BEVILL

More than a dozen Rapid City, S D , businesses now allow customers to pay for their purchases using something ever yone has and never forgets at home their fingers. The eateries, retail shops and health care service providers are among the first in the world to test a payment system called Nexus Smart Pay which uses a payment terminal that looks similar to existing credit card terminals, except this one identifies users through a fingerprint scan

The biometric-payment system, believed to be the first of its kind, is being rolled out by Nexus USA, a subsidiar y of Spain-based authentication technology developer Hanscan ID Management

More than 700 people in the Rapid City area have set up accounts to use the Smart Pay system so far and new merchants are signing on ever y week, according to Chris Edwards, business development director

“Most people are pretty fascinated by the whole concept of being able to pay for stuff with your finger,” he says “And the proposition for the consumer is that it’s ultra-convenient in addition to it being highly secure by virtue of the fact that there’s nothing to lose you can’t lose your currency, your payment card, people can’t steal your finger nor can they steal your fingerprint and recreate it ”

Additional security is also a benefit to businesses, says Marsha Hengen, owner of Great Harvest Bread She has been offering the pay-bytouch system to her customers since April 1

“To me, [security] is the biggest thing in today’s environment,” she says. “So many times, people don’t sign their credit cards and you try to check them all or ask for ID, but that doesn’t happen all the time. This is a little bit more secure, for us and the customer ” Plus, she says, “We just think it’s very cool technology and a great opportunity to support another local business.”

About 30 million Euros have been invested in developing the technology, according to Edwards

Hanscan began developing the core security technology about eight years ago, but the Smart Pay system in use now has been under development for only about two years. According to Edwards, the company had developed the payment terminal for another use, but after being asked by a merchant to utilize it as way to monitor loyalty program transactions, the project took on a life of its own and quickly showed unexpected global potential After publicly launching a pilot project at the South Dakota School of Mines and Technology last January, the company was inundated with calls from payments industry giants and large banks from around the world, all keen to replace today’s plastic card system

“We know that we have the tiger by the tail if we can make it work,” he says “And we ’ re so far along in the development now that it’s not a matter of ‘if,’ it’s a matter of ‘when.’ Our challenge is to make it work while we ’ ve still got critical mass and before anyone else comes along to make a similar mouse trap ”

Edwards says Nexus has a leg up on potential competitors because its system doesn’t require participation from third-party processors, enabling it to offer merchants lower payment processing fees than credit card options. It also has been able to successfully address some of the scalability issues that have previously prevented biometrics systems from being used for this type of application Edwards says the company retains none of its users ’ bio-data and user-provided information retained for debit processing is encrypted as it travels through the system, making it less vulnerable to hacker attacks than the process commonly used for card systems.

Mary Beth Seamands, director of sales and marketing at Isis Hospitality LLC, says the security factor and the convenience of the system are what attracted her company to the concept. Isis Hospitality began offering the Nexus system as a payment option to customers at Seattle’s Best Coffee nearly a year ago and recently added the option at Paddy O’Neill’s Irish Pub and Vertex SkyBar.

“The convenience provided our guests was paramount in the decision to move forward with Nexus Smart Pay,” she says “As more of our lives revolve around technology, implementing a system that offers such convenience, but also the security of biometrics, is a great asset to our company and guests ”

Rapid City is ground zero for the system’s roll-out, but Edwards says the service area will soon include nearby Spearfish, S D After perfecting the system locally, the company intends to expand to major metropolitan areas this fall, likely targeting Colorado cities like Denver and Boulder first Ultimately, the company would like its biometric system to replace the existing plastic card system, a monumental task which would require a partnership with a major provider such as Visa, MasterCard or American Express Edwards expects that time may be coming soon. “From a logic standpoint, I think our future has somebody like that in its crosshairs, but that remains to be seen. ” PB

Kris Bevill Editor, Prairie Business 701-306-8561, kbevill@prairiebizmag com