First, Fingerprint based, Merchant Payments system is coming

Even as Apple rides on the success of its iPhone 5s with Touch ID, a number of Android phone makers are rushing to the market to replicate that feature. In October 2013, Danal, a Korean service provider, may have gone one step ahead as it launched the first ever system that claims to allow payments with the help of fingerprint technology. From a consumer adoption perspective South Korea is ahead of most countries in the world and thats what got us excited. Would this become the first fingerprint based payments system that achieves scale?

Danal partnered with the fingerprint technologies of Crucialtec to create the BarTong. The technology has been loaded onto Pantech’s VEGA LTE-A smartphone. For consumers to use the feature they will have to download an app called BarTong. This will enable the phone to work as a debit card or simple cash in case of convenient stores. The four digit pin is no longer required.

Danal had introduced ‘Bartong’ barcode payment, in early March 2011, where users could easily and quickly generate a barcode. This could be used by merchants with the help of a standard barcode scanner, and process a payment quickly and easily. At the point of sale, a user did not have to bring their credit card or cash to make a purchase.

According to Lee Seock-hwan, Executive of Payment business division at Danal, Since the iPhone 5S adopted fingerprint sensors, Android-based handset makers have been taking into account the possibility of fingerprint functions. He stated, We will continue to partner with Crucialtec to unveil diverse fingerprint services for mobile payments. There are other smarthphone/Tech firms already using Fingerprint authentication as we discussed sometime. Suddenly after iphone 5S announcement the momentum seems to be building behind biometrics and their linkage to payments. On the iphone 5S it currently only allows to unlock the screen and to buy apps on Appstore. Nothing more than that.

LTP View: The fingerprint scanner gets rid of the need to have a 4 digit pin which eases transactions considerably. According to Biometrics Research Group, there will be more than 700 Mn users of biometrics technology, that will spend over $750 Bn in annual transactions. This shows a vast market, which Danal may have been wise to leap into. It is only a matter of time before other competitors launch their own version of fingerprint enabled payment systems. Danal is looking to expand the payment service into US and China which is good. From a consumer standpoint, we have seen studies wherein, take out any un-necessary time and complexity from the transaction and they will buy more.