Biometric payment adoption grows as Amazon lawsuits allege data privacy violations
Biometric payment systems – and privacy concerns surrounding those systems – are on the rise. Biometric payments could provide frictionless checkout and facilitate more sales, companies claim. Consumers are divided on the implementation of such a system – with some taking Amazon to court.
Biometric identification for payments, loyalty programs
Ecommerce platform provider FreedomPay has announced that customers can now use Amazon’s One palm biometric system as a method of payment. Amazon One hardware creates a palm template and stores the data on a “custom-built” cloud rather than the device.
FreedomPay randomly generates a token for each user to protect sensitive information like bank accounts and credit card numbers while allowing merchants to recognize customers, according to the release. It also allows customers to build profiles of spending patterns to give insights and present targeted loyalty programs, promotions, and rewards.
Meanwhile, in Japan, Hitachi and Tobu Railway announced a partnership to develop a biometric payment system that recognizes users’ faces and the veins in their fingers for commercial use, according to a release. The system would be used for payments and loyalty rewards. Kiosks using the system are set to be installed at select supermarkets around Tokyo by the end of the fiscal year.
Lumen Field also added eight more of Amazon’s Just Walk Out (JWO) stores after seeing a 112 percent increase in total sales during last season, making it the venue with the most checkout-free locations in the world.
JWO stores collect a payment method using Amazon One’s palm reading or a credit card. Customers can then enter the store upon which computer-vision surveillance tracks what goods they collect, add them to a virtual cart, and then charge them as they leave the store.
Privacy lawsuits against Just Walk Out system, distrust in biometric implementation
As biometric payment methods call on consumers to share personal data for consumption, Canadians are divided on using biometrics for purchases between age groups, according to a Research Co. poll. Fifty-four percent of Canadians aged 18-34 “would welcome a world where payments can be made through biometrics,” says Research Co. President Mario Canseco. “Their counterparts aged 35-to-54 (44%) and aged 55 and over (31%) are not as certain.”
In the U.S., Amazon’s JWO is under legal scrutiny for alleged privacy violations. One lawsuit filed in September of this year claims that the system violated the Illinois Biometric Information Privacy Act because Amazon did not obtain written permission to gather, maintain, or share biometric data, according to Law 360.
A New York city class action lawsuit filed in March argued that Amazon waited months after the Biometric Identifier Information Law took effect on January 15th, 2022 to put up signs explaining how the JWO system tracks customers.