TrueMe ID Is a Precursor to Online Payments, Pay By Touch Says

Pay By Touch Inc., which on Monday introduced a new, personal-computer-based authentication service based on fingerprint identification, plans to couple the new service with online payments and loyalty programs some time in the first half of 2007. The new product, called TrueMe, relies on the San Francisco company's technology, along with fingerprint sensors from UPEK Inc., Emeryville, Calif., to authenticate consumers when they log into Web sites. Pay By Touch says it hopes TrueMe will help combat phishing, keylogging, and other frauds plaguing the Internet. “Home users are the most targeted attack sector [for fraudsters],” says Jon Siegal, executive vice president at Pay By Touch. “It's a big problem.” The first Web site to adopt the product is Salesforce.com, a provider of customer-management systems that has half a million users. Siegal says more sites are in the pipeline, including an application involving remote deposit capture, the process by which paper checks are truncated into electronic image files for processing. At the same time, Pay By Touch has certified fingerprint sensors already built in to the X60 and the T60 laptops made by Lenovo Group Ltd. For users with machines that lack integrated sensors, Pay By Touch has arranged with UPEK to produce USB-enabled external devices. TrueMe is the first of a series of online applications Pay By Touch, which specializes in authenticating point-of-sale payments for supermarkets and other stores, plans to introduce over the next 12 months, Siegal says. He says an online version of Pay By Touch's payments product will arrive during the first half of next year and will rely on TrueMe to authenticate users. In February, Pay By Touch announced a product for Web-based payments, called Pay By Touch Online, that included sign-in and multifactor authentication applications (Digital Transactions News, Feb 6). Siegal says TrueMe is essentially these two components of Pay By Touch Online. “This is the first service made available under Pay By Touch Online,” he says. “This is the first chapter of the story.” Siegal says the company originally intended to introduce the sign-in and authentication components in the spring, but found the technologies behind the product needed more work. This included the technology behind the fingerprint sensors. “We weren't able to deliver in the spring time,” he says, adding Pay By Touch wanted to make sure “the technologies and user experience were where they needed to be.” He says, though, that the company's plan all along was to introduce serially the Pay By Touch Online components as stand-alone products. “It's safe to say we expect within 12 months to have millions of users of our Internet-based services,” including the yet-to-be-introduced payments and loyalty components, Siegal says. To use TrueMe, users visit a supporting Web site to enroll. This process allows users to store a mathematically derived template of a fingerprint in Pay By Touch's servers. Upon subsequent visits, users touch their integrated or attached sensors to establish their identity. The system sends fingerprint data and a unique device ID to Pay By Touch's servers directly from the sensor, so the data traffic never flow through the machine's operating system or the public Internet. The same system can also be used to secure access to the computer itself. Pay By Touch has not announced pricing for the service, except to say it is offered to e-commerce operators on a “per-user, per-year” basis. In addition to combating phishing and other online frauds, TrueMe will help banks meet stringent guidelines issued last year by the Federal Financial Institutions Examination Council, Pay By Touch says. By the end of 2006, financial institutions must have in place a workable plan to authenticate online-banking customers by means more robust than standard user-name/password combinations, according to the guideline. “We absolutely believe TrueMe satisfies the FFIEC guidance,” Siegal says. “It presents a significant business opportunity for us.” Pay By Touch, which recently reached the 3-million mark in consumers enrolled for its POS service, has installed its system in 2,400 stores. In addition, it processes card transactions for some 125,000 merchant locations and Web sites as a result of its acquisition last year of CardSystems Inc., a merchant-acquiring processor. And one of its units, ATM Direct Inc., is marketing an online-payments service, unrelated to Pay By Touch Online, that lets consumers use their PIN debit cards to pay e-commerce sites.