Pay By Touch

» see paybytouch.com as it lived, on the wayback machine

~ the last words ~

Pay By Touch lived entirely inside the American supermarket checkout lane, a room I have never stood in. In 2007 I was at university in Turkey, paying for things with cash or with a card, and the idea that a grocery store would take my fingerprint instead would have sounded like a story about somewhere else. So this one is reconstruction from the record. I wanted to write it anyway, because the product is the boring half and the wreckage is the interesting half.

The pitch was clean. You enrolled once at a kiosk, gave a finger and a bank account, and then paid by pressing a scanner and typing a short code. No card, no signature. Solidus Networks started selling it in 2002 under the Pay By Touch name and it worked well enough that it spread to thousands of stores, including Albertsons, Jewel-Osco, Cub Foods, Farm Fresh and a run of Shell gas stations. By the end around three million Americans were enrolled, which for a payment method nobody had heard of five years earlier is a real number.

Founder John Rogers raised more than $340 million for it, much of that from people who did not normally take a flyer on payments startups. The company hit roughly 750 employees. Then it stopped, quickly and badly, and almost none of the reasons had anything to do with whether fingerprint payment was a good idea.

~ the record ~

~ the money ~

Through 2007 the story became about Rogers rather than the product. Investors, employees and former executives went to court, and the company burned cash faster than a payments processor of its size could justify. On 31 October 2007 a group of employees filed an involuntary bankruptcy petition against Solidus Networks, and Rogers filed for personal bankruptcy protection on the same day. Solidus filed its own Chapter 11 on 14 December 2007.

The biometric business was switched off first because it was the part with running costs and no buyer. Solidus told merchants and members that it would stop processing biometric transactions as of 11:59:59 PM on 19 March 2008. That is an unusually precise way to announce a death, and it is the kind of precision you only get from a payments company, which has to name the second the ledger stops.

~ the fingerprints ~

Here is the part that outlived the company. Bankruptcy is an asset sale, and the largest asset Pay By Touch had built was three million enrolled fingerprint records. Nobody involved could say clearly who would end up holding them or under what terms, because in 2008 in the United States there was no law that said. Biometric data was just data, and data was just an asset.

Illinois legislators watched that happen and passed the Biometric Information Privacy Act in 2008, the first statute of its kind in the country, which requires written consent before a private company collects a fingerprint or a faceprint and gives individuals a private right to sue when it does not. Almost every biometric privacy case argued in the United States since then runs through that law. It exists because a supermarket payments startup went bankrupt and left three million fingerprints on the table with a price on them.

@}-->--

              )
             (_)
            .-'-.
            |   |
            |   |
            |   |
            |   |
          __|   |__   .-.
       .-'  |   |  `-:   :
      :     `---'     :-'
       `-._       _.-'
           '""""""

« previous  ·  random  ·  next »