This September marks the three-year anniversary of Amazon debuting Amazon One, its contactless palm recognition payment technology.
The omnichannel retailer launched the payment option at two of its Amazon Go stores in Seattle in 2020. Consumers, after signing up for the service, hover a palm over a store device to pay for purchases. The system's hardware captures the most minute palm characteristics, from lines and ridges to vein patterns for developing the user's palm "signature." Users don't have to have an Amazon account to sign up.
In announcing the technology Amazon stated it planned to deploy the system in more Amazon stores, said it had "broad applicability beyond retail stores," and planned to offer it to third parties, from retailers to stadiums to office buildings. Amazon took the palm recognition approach given the level of security and privacy compared to other biometric options. The contactless approach — in the wake of the COVID-19 pandemic — was viewed as timely and welcomed.
Now, just about three years on, Amazon One popped up in a Whole Foods Market store at an Austin, Texas location. Amazon bought Whole Foods Market in 2017 for $13.7 billion. It's the first region outside Seattle where a Whole Foods Market is offering the payment option. The system is in the process of being added to all seven Austin locations.
In the same time frame, Amazon announced that Coors Field, home to the Colorado Rockies major league baseball team, is the first sports venue to use Amazon One for age verification.
"Customers love the convenience of paying with their palm; however, when it comes to purchasing alcohol, friction is reintroduced as customers must produce a government-issued ID for age verification," stated a press release announcing the deployment. "We're solving that customer pain point and improving the guest experience with the launch of a new capability called "age verification," which enables adult customers ages 21 and over to purchase alcoholic beverages by simply hovering their palm over an Amazon One device, without digging into their wallets for a physical government-issued ID."
In late February of this year, Panera announced it was piloting the tech. It is now the first national restaurant using it for loyalty and payments, according to a Panera press release.
As of early May, Amazon One was available at more than 100 Whole Foods Market locations, select Amazon Go and Amazon Fresh stores and third-party locations ranging from convenience stores, travel retailers including Hudson to retail venues within airports.
To learn more about how and why Amazon One is taking root, RetailCustomerExperience reached out to Peter Galvin, chief growth officer at NMI, a full commerce enablement technology company. The company's inaugural Payments Innovation Pulse Report focused on consumer sentiment around payment innovations. NMI surveyed 1,000 U.S. consumers in October 2022. The data revealed the majority of consumers are willing and eager to try emerging payments technologies, such as contactless payments and biometric payments, and that speed and convenience are the driving forces behind these purchasing preferences.
More than half (58%) of consumers ages 18-24 and 55% of consumers ages 25-40 have used biometric payments, compared to 24% of consumers ages 41-56 and under 10% of consumers ages 57 and above. Among consumers unfamiliar with biometric payments, 68% of those ages 25-40 are likely to use biometric payments if a business offered it, according to NMI, and consumers of other age groups are less likely to use biometric payments in this case.
Overall the data revealed nearly half (47%) of consumers say they'd likely use biometric payments if a business offered it.
Galvin provided greater detail on the data and findings in an email interview.
Q. How would you describe where biometric palm scanning tech is right now within the retail landscape — just breaking out, taking root, etc., and while Amazon is a big name obviously propelling it, do you see more options coming for retailers in terms of tech systems?
A. Biometric palm scanning today is still in the testing phases. Right now, Amazon is by far the biggest driver of this technology. No other major players are using true biometric palm scanning in their retail locations. One big advantage for Amazon is that Amazon users can register with Amazon, put in their payment information and tie it into their biometric information within their Amazon account.
While palm scanning payments are still in the early stages, the fact that it exists helps to drive the point that customers are always looking for ways to make payments more convenient. We are really starting to see biometric backgrounds being used on mobile devices, but we're still in the early phase of eliminating that mobile device and using biometrics directly at checkout.
Q. What are some reasons retailers may be reluctant to jump on the tech? Is it internal resources being required, or data security concerns?
A. One big reason retailers are reluctant to jump on this technology is that it's fairly expensive right now for retailers to implement. Retailers also would have to go through the hassle of reconfiguring a lot of their current payment systems that are not set up to handle biometrics. Privacy concerns among consumers are also a big hurdle for retailers to overcome as consumers are worried about what could happen if an organization loses their biometric data. While resources, upgrade costs and privacy concerns are preventing faster adoption in the short term, the long-term vision is very strong. It will be a lot easier for retailers to implement these technologies in the future as costs are lowered and payment systems are eventually upgraded.
Q. Where is the consumer at this point with using such technology? Is it very generational in that the younger consumer will use it?
A. Right now, using this technology is very generational as younger consumers are more focused on using technology for their payments. Many Millennials and Gen Zers do not even carry cash and prefer digital wallets as opposed to physical payment cards. In fact, recent data found that 67% of Millennials already use digital wallets. These younger consumers have been the ones to really embrace biometric payments and they will be the biggest drivers of adoption going forward.
Q. What is needed from retailers and consumers for technologies like Amazon One's biometric palm scanning technology to see widespread adoption?
A. In order to see more widespread adoption of new payment technologies, consumers must get more comfortable using these options at checkout. Retailers also need to make it easier for consumers to enroll in biometric technologies, while ensuring security is an important component of that. Having a more universal way to bring biometric information to a storefront and have a retailer process it would also be a big step toward further adoption. Right now, biometric information is stored locally on a consumer's device and the store can use that biometric information from the device to authenticate the consumer's payment. New technologies authenticate that payment using the same biometrics but on a public device like a palm scanner at checkout and that really changes the dynamic for consumers. While increased adoption will certainly depend on how consumers feel paying this way, easier in-store enrollment in biometric technologies will help customers become more comfortable with using biometrics in a retail setting.
Q. Is the current customer experience with biometrics good at this point or do you think it can be better or get better and why?
A. In the case of Amazon, I don't know enough about their specific customers to say how they are feeling about this technology one way or another. Overall, customers today are becoming increasingly comfortable using biometrics on their phones and still relying on that mobile device in the instances they want to make an in-store payment with biometrics. While this is a good start, the customer experience will continue to improve as customer and merchant adoption increases and the technology improves.
Q. What can retailers do to make sure they are set up to process biometric payments?
A. Retailers today need to make sure they are well-positioned to process biometric payments as these types of payments are the way of the future. One of the biggest things retailers can do right now is to accept digital and mobile payments as this is a key first step to accepting biometric payments. Merchants must work with their independent software vendor and independent sales organizations partners to achieve this. Additionally, merchants must run on modern systems as outdated or legacy tech stacks will most likely not be well equipped to handle new methods like biometrics. Many retailers don't have the resources or technical expertise to implement new payments tech alone so finding the right ISV or ISO partner to handle the integration and ongoing management of the payment system will save merchants significant time, money and hassle.
Q. What were the top findings, the biggest surprises from the report?
A. The data findings on biometric payments were one of the biggest surprises to me. Our report revealed 91% of consumers were already familiar with biometric payment technology. For a technology that is still pretty new, that jumped out as a significantly high number. However, only 36% of consumers have used biometric technology to make a purchase. This is primarily due to a lack of availability of biometric payment options. Even among respondents who were unfamiliar with biometric payments, 47% said they'd likely use this technology if a business offered it — further evidence that consumers are looking for these types of payment options and it's up to merchants to make sure they accept biometric payments.